Deal to scrap tariff hikes a win for the housing market

The Trump administration has reached a deal to scrap tariff hikes on Chinese goods set to take effect on Sunday and slash some existing duties in half, according to CNBC. That’s a positive for the housing market, according to economists.
It comes with a caveat, though. A similar announcement in October of a “Phase 1” deal was nixed later by China, though not before it caused a U.S. stock market rally and three days of positive headlines.
If this latest agreement holds, it would cancel the hikes scheduled for Sunday and cut existing tariffs in half on $360 billion in Chinese products, according to CNBC.
“Resolving some of these trade disputes would be good for U.S. economic growth and good for the overall housing sector,” National Association of Home Builders Chief Economist Robert Dietz told HousingWire in an interview.
Tariffs have a direct impact on housing by boosting the cost of materials, he said. Many of the ingredients that go into a home, such as drywall, nails, kitchen countertops and asphalt roof shingles, are imported from China.
And, no, China is not paying the tariffs, Dietz said. The tariffs are collected by U.S. Customs agents from importers when goods enter the country.
But there’s a secondary housing impact as well, Dietz said.
“The indirect effects of tariffs are seen in regional economies that are weaker due to the reduction in exports, a reduction in manufacturing activity and slower income growth,” Dietz said. “We looked at U.S. counties with economies connected to manufacturing, and found they were really hurting in terms of single-family construction and multi-family development.”
Tariffs make new homes more expensive and restrict supply by making it more difficult for homebuilders to do business, according to Lawrence Yun, chief economist of the National Association of Realtors.
“The demand side of housing is very good right now because of the lower mortgage rates and a strong jobs market,” Yun said in an interview. “It’s the supply side and affordability issues that are restraining the market, and material costs are an important part of that.”
The biggest boost a deal would provide, if the announcement holds, is a degree of certainty for the economy, said Dean Baker, a senior economist with the Center for Economic and Policy Research in Washington, D.C.

Comments

Post a Comment

Popular posts from this blog

Crucial Coronavirus Cleaning Tips: How To Keep Your Home Germ-Free During the Pandemic

Image
How long the virus survives—and where it thrives The novel coronavirus can survive on surfaces anywhere from hours to days. The latest information is that it can last 24 hours on cardboard, 48 to 72 hours on plastic, and 48 to 72 hours on stainless steel, says  Dr. Reuben Elovitz , internist and CEO at  Private Health Dallas , who cited a recent study from the  New England Journal of Medicine . The duration also depends on a few other factors, like temperature and whether a surface is prone to holding moisture. “Wooden handles, for example, are more likely to be damp than metal under normal conditions—and damp conditions can enable many infectious agents to thrive,” explains molecular biologist  Dr. Tracey Evans . “ Furthermore, a warm room is more favorable for many pathogens than a cold one.” Regardless of what kinds of temperatures and surfaces you have in your home, there are things you can do to keep these dangerous pathogens at bay. Ditch germs at ...
Read more

7 Ways to Create a Neighborly Front Yard

Image
1. Shade the Sidewalk Consider placing a tree where it will shade the sidewalk to help create a pleasant environment and encourage walking and visiting among neighbors. Trees provide rain and sun protection, and temperature differentials of 5 to 15 degrees are felt when walking on tree-canopied streets. In urban areas trees help mitigate the  heat-island effect  and provide a connection to nature. Most cities require permits for adding trees to a parkway (or hell strip), but permits are not usually required for planting on private property. Sean Papich Landscape Architecture 2. Set the Fence Back Placing a low fence or wall back a few feet from the edge of the sidewalk allows room for planting, and plants provide visual interest for pedestrians. In addition to cheerful  daisies  like these, velvety plants such as  lamb’s ears  ( Stachys byzantina ;   USDA zones 4 to 9;  find your zone ) would work well. June Scott Design ...
Read more

What’s New in Outdoor Lighting Design

Image
Linear Lighting There’s a trend toward the more extensive integration of lighting with modern hardscape elements. Sleek, minimalist linear step lighting illuminates a path while keeping light fixtures hidden from view. It also enables you to more easily highlight an architectural feature, such as stairs or a freestanding wall.  ZEN Associates, Inc. Laurie Ghielmetti Floating Structures Another trend is placing lights beneath landscape structures, creating the illusion that they are floating-- light is hidden to visually float steps, benches, bridges and other outdoor landscape elements. dSPACE Studio Ltd, AIA BEGA North America Sleek, Modern Fixtures A big trend is to use path lights that look more architectural, rather than the traditional flower or mushroom shapes. Pistils Landscape Design + Build Nightfall Landscape Lighting Low-Voltage Lighting While low-voltage lighting is not necessarily a new concept,...
Read more