As BAGI members — along with homebuilders, remodelers and consumers nationwide — are well aware, costs are unfortunately climbing higher.

Rising labor costs, land prices and permit fees have been contributing to escalating home prices for years, but tariffs imposed throughout the past year and a half have added an additional burden to the industry.

In May, an increase from 10% to 25% on $250 billion worth of Chinese imports marked the biggest blow for American homebuilders. Of the nearly 6,000 items affected in that round of tariffs, more than 450 are common in home construction.

Analysis from the National Association of Home Builders says the industry’s additional annual costs will rise $2.5 billion due to tariffs alone. Home prices at the low end of the market will continue to escalate as rising material costs make it more difficult for builders to turn a profit on entry-level, single-family housing.

Builders can only absorb so much of the rising costs of materials before they’re forced to offset increases onto the consumer — leaving homebuyers to discover their dollars won’t stretch as far as they may have initially expected when it comes to purchasing a new home or planning a renovation.

Along with the NAHB and the rest of our peers in the homebuilding industry, BAGI is keeping a close eye on ongoing trade policy developments and is hopeful for a full repeal of the tariffs as soon as possible.

In the meantime, BAGI recommends all members engage in transparent, upfront conversations with consumers early in the planning and design phases of their projects about how material prices have changed and can affect their total costs.

In a constantly evolving and changing housing landscape, BAGI is committed to being an advocate for our members on issues affecting them and the Greater Indianapolis homebuilding industry. Learn more about the BAGI mission, membership benefits and the ongoing advocacy, networking and education opportunities available by creating your own BAGI journey today.