Household Appliance Manufacturers NAICS 3352

Mar 24, 2025 - Tariffs May Hinder Appliance Demand

• On March 12, the Trump administration imposed 24% tariffs on all US imports of steel and aluminum, which are expected to increase the costs of many downstream metal products, according to the Associated Press. A 25% tariff on all imports from Canada and Mexico may go into effect in early April. There is also a 25% tariff on all imports from China. The Trump administration hopes the tariffs will prompt more reshoring of US metal production and boost US manufacturing jobs. However, tariffs are driving up the costs of building new homes and remodeling projects, which could hurt demand for appliances if those markets experience a slowdown. In 2024, China accounted for 43% of all US household appliance imports. Nearly 24% of appliance imports came from Mexico, and about 2% were from Canada.
• Some home builders are buying up extra lumber, fixtures, appliances, and other materials ahead of Trump administration tariffs, but the strategy could prove risky if high home prices keep buyers away, according to The Wall Street Journal. Some builders are pivoting to less expensive materials or reducing home sizes to offset the potential rise in materials costs brought on by tariffs. Industry observers suggest large home builders are better shielded from tariff-related uncertainty as their size gives them greater buying power to resist price hikes. However, smaller builders are more vulnerable. Building stockpiles of supplies presents risks for builders and distributors if demand dips and they are stuck holding unsold inventory. The National Association of Home Builders estimates that tariffs could increase the cost of building a single-family home by $7,500 to $10,000.

• A lack of affordability in the new single-family home market could slow appliance demand. In 2025, nearly 75% of US households are unable to afford a median-priced new home, according to the National Association of Home Builders. Given a median new home price of $459,826 and a 30-year mortgage rate of 6.5%, more than 100 million US households are priced out of the market. In 23 US states and Washington DC, more than 80% of households cannot afford a median-priced new home, suggesting a significant discrepancy between home prices and household incomes.
• Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase by 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements to be supported by rising home values, a steady labor market, and gradually improving existing home sales. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.