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home : most recent : residential development August 14, 2018


8/6/2018 5:26:00 PM
Number of new Indiana home permits fall as tariffs and labor costs increase
By the numbers

June single-family building permits in Indiana 

2011 - 963

2012 - 1,018

2013 - 1,219

2014 - 1,267

2015 - 1,309

2016 - 1,394

2017 - 1,627

2018 - 1,493



Christopher Stephens, Herald Bulletin

ANDERSON – Permits for new home construction fell 10 percent this month as tariffs on Canadian softwood, steel and aluminum plague the industry.

The United States Census Bureau has reported 1,493 single-family permits for the month of June, a 10 percent decrease from May 2018 and an 8 percent decrease from June 2017, across the state.

“Well, clearly there is a whole lot of things going on over the past two years. Prices have spiraled out of control,” said Paul Schwinghammer, president and owner of Hallmark Homes in Anderson. “One has been the pure supply and demand over the past 24 months has been at record levels.” 

The number of new homes permits across Indiana in June has grown steadily since 2011, from 963 to 1,627 in June 2017.

As demand continues to recover after the 2008 housing crash, tariffs on wood building materials, as well as the metals used to make housing fixtures and appliances, have pushed new single-family homes prices up by more than $6,000, according to the Indiana Builder’s Association.

“The concern over material and labor costs is making it more difficult to build homes at competitive price points, particularly for newcomers entering the housing market,” Indiana Builders Association Chief Executive Officer Rick Wajda said. “We will continue to have discussions with our federal policy makers on the rising construction costs and encourage them to take action to keep housing affordable across the country.”

Schwinghammer said the new home market is seeing a “perfect storm of multiple problems,” that’s been exacerbated by government intervention.

“When you have increasing prices of material and labor and increasing interest rates, it squeezes many buyers out of the market,” he said. “Affordable housing is almost an oxymoron because it’s hard to find something that is qualified as affordable when it comes to a new home.”

And tariffs on Canadian wood isn’t the only negative effect driving up prices for new homes.

A duty on Chinese raw steel and aluminum means hardware and appliance manufacturers are making it hard to keep new home prices steady and pushing some people out of the market, Schwinghammer said.

“The tariffs they are imposing on Chinese manufacturers is a problem — think about all the lighting fixtures — so you have some of those products that go into a home, so things like that can all of a sudden really add up,” he said.

And the high home prices are likely to stay high even if tariffs are removed, because high-quality workers are at a premium.

“Once labor gets to a certain point, hard to start paying people less. … But even still if we could get tariffs lifted, that certainly would help,” he said.

Related Stories:
• As the U.S. imposed tariffs ramp up, they may have unintended consequences

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