Paint and Wallpaper Stores NAICS 444120

Mar 28, 2025 - Homeowners Pull Back on Remodeling Amid Tariff Jitters

• Tariffs, deportations, and high interest rates are giving some homeowners second thoughts about new home improvement projects, according to the Financial Times. In January, pending home sales hit an all-time low, according to The National Association of Realtors. Pending home sales are an indicator of remodeling demand as homeowners often fix up homes before putting them on the market, and buyers make improvements before moving in. In a recent earnings call, Home Depot’s CEO said that while the US’s aging housing stock is supportive of home improvement spending, an uptick in 2025 isn’t a given. The Trump administration’s deportation activities may also contribute to workforce instability in the construction sector, which may give some homeowners pause about starting major improvement projects.
• In March, the American Coatings Association (ACA) issued a statement suggesting that tariffs on US imports from Canada, Mexico, and China will increase costs for manufacturers and consumers. According to the ACA, the US coatings industry enjoys a positive trade surplus of $1.7 billion. Canada, Mexico, and China are the US coatings industry’s largest trading partners. The industry’s trade with Canada and Mexico is valued at $1.2 million and $815 million, respectively. The value of the industry’s trade with China is $117 million.

• Home builder confidence in the single-family market dropped in March 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), dropped three points to 39 in March from 42 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. While builders still face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages, the industry is encouraged by the Trump administration’s emphasis on reducing regulations.
• Demand for building design services declined in February over the prior month amid ongoing economic uncertainty, according to a March report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 45.5 in February from January’s reading of 45.6. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 47.8 in February compared to 51.4 in January, and the index for the value of new design contracts dropped to 42 from 46.2. The AIA’s Chief Economist, Kermit Baker said, "Conditions in the broader economy were generally positive in February, with the Consumer Price Index (CPI) increasing by only a modest amount, long-term interest rates easing from January levels, and healthy job growth. However, uncertainty surrounding the impact of recently announced tariffs may lead to a rise in building material prices in the coming months while immigration policy may put even more pressure on an already undersupplied construction labor market."