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Shopping for a new home? Ready to renovate your kitchen or install a new deck? You’ll be paying more to do so.The Trump administration’s tariffs on imported goods from Canada, Mexico and China some already in place, others set to take effect in a few weeks are already driving up the cost of building materials used in new residential construction and home remodeling projects.The tariffs are projected to raise the costs that go into building a single-family home in the U.S. by $7,500 to $10,000, according to the National Association of Home Builders. Such costs are typically passed along to the homebuyer in the form of higher prices, which could hurt demand at a time when the U.S. housing market remains in a slump and many builders are having to offer buyers costly incentives to drum up sales.We Buy Houses in San Francisco, which purchases foreclosed homes and then typically renovates and sells them, is increasing prices on its refurbished properties between 7% and 12%. That’s even after saving $52,000 in costs by stockpiling 62% more Canadian lumber than usual.“The uncertainty of how long these tariffs will continue has been the most challenging aspect of our planning,” said CEO Mamta Saini. Bad timing for builders The timing of the tariffs couldn’t be worse for homebuilders and the home remodeling industry, as this is typically the busiest time of year for home sales. The prospect of a trade war has roiled the stock market and stoked worries about the economy, which could lead many would-be homebuyers to remain on the sidelines.“Rising costs due to tariffs on imports will leave builders with few options,” said Danielle Hale, chief economist at Realtor.com. “They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes.”Prices for building materials, including lumber, have been rising, even though the White House has delayed its tariffs rollout on some products. Lumber futures jumped to $658.71 per thousand board feet on March 4, reaching their highest level in more than two years.The increase is already inflating costs for construction projects.Dana Schnipper, a partner at building materials supplier JC Ryan in Farmingdale, New York, sourced wooden doors and frames for an apartment complex in Nassau County from a company in Canada that cost less than the American equivalent.Half the job has already been supplied. But once the tariff goes into effect it will be applied to the remaining $75,000, adding $19,000 to the at-cost total. Once JC Ryan applies its mark up, that means the customer will owe $30,000 more than originally planned, Schnipper said.He also expects the tariffs will give American manufacturers cover to raise prices on steel components.“These prices will never come down,” Schnipper said. “Whatever is going to happen, these things will be sticky and hopefully we’re good enough as a small business, that we can absorb some of that. We can’t certainly absorb all of it, so I don’t know. It’s going to be an interesting couple of months.”Sidestepping the tariffs by using an alternative to imported building materials isn’t always an option.Bar Zakheim, owner of Better Place Design & Build, a contracting business in San Diego that specializes in building accessible dwelling units, or ADUs, said Canada remains the best source for lumber.By sticking with imported lumber, Zakheim had to raise his prices about 15% compared with a year ago. He also has 8% fewer jobs lined up compared with last year.“I’m not about to go out of business, but it’s looking to be a slow, expensive year for us,” he said. Tariffs rollercoaster On March 6, the Trump administration announced a one-month delay on its 25% tariffs on certain imports from Mexico and Canada, including softwood lumber. Tariffs of 20% on imports from China are already in effect. A 25% tariff on steel and aluminum imports50% on those from Canadakicked in on March 12.Tariffs on Mexican and Canadian goods slated to go into effect next month will raise the cost of imported construction materials by more than $3 billion, according to the NAHB. Those price hikes would be in addition to a 14.5% tariff on Canadian lumber previously imposed by the U.S., ratcheting up tariffs on Canadian lumber to 39.5%.On Air Force One, President Donald Trump said he was pushing forward with his plans for tariffs on April 2 despite recent disruption in the stock market and nervousness about the economic impact.“April 2 is a liberating day for our country,” he said. “We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”Building materials costs overall are already up 34% since December 2020, according to the NAHB.Builders depend on raw materials, appliances and many other components produced abroad. About 7.3% of all products used in single-family home and apartment building construction are imported. Of those, nearly a quarter come from Canada and Mexico, according to the NAHB.Both nations also account for 70% of the imports of two key home construction materials: lumber and gypsum. Canadian lumber is used in everything from framing to cabinetry and furniture. Mexican gypsum is used to make drywall.Beyond raw materials, refrigerators, washing machines, air conditioners, and an array of other home components are manufactured in Mexico and China, which is also a key source of steel and aluminum.The tariffs will mean higher prices for home improvement shoppers, said Dent Johnson, president of True Value Hardware, which operates more than 4,000 independently owned hardware stores.“The reality is that many products on the shelves of your local hardware store will eventually be affected,” he said in a statement emailed to the Associated Press. Chilling effect Confusion over the timing and scope of the tariffs, and their impact on the economy, could have a bigger chilling effect on the new-home market than higher prices.“If consumers can’t plan, if builders can’t plan, it gets very difficult to know how to price product because you don’t know what price you need to move it,” said Carl Reichardt, a homebuilding analyst at BTIG. “If people are worried about their jobs, worried about the future, it’s very difficult to make the decision to buy a new home, whatever the price.”The uncertainty created by the Trump administration’s tariffs policy will probably result in increased volatility for home sales and new home construction this year, said Robert Dietz, the NAHB’s chief economist.Still, because it can take several months for a home to be built, the larger impact of from building materials costs are going to happen “down the road,” Dietz said.The impact tariffs are having on consumers is already evident at Slutsky Lumber in Ellenville, N.Y.“There ar not as many people getting ready for spring like they usually are,” said co-owner Jonathan Falcon. “It seems like people are just cutting back on spending.”Falcon also worries that smaller businesses like his will have a tough time absorbing the impact of the tariffs.“This is just like another thing that’s going to be harder for small lumber yards to handle than the big guys and just sort of keep driving businesses like us to not make it,” he said.__Reporter Anne D’Innocenzio contributed. Alex Vega and Mae Anderson, AP Business Writers
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E-Commerce
Forever 21 is facing another bankruptcy. The company that operates the fast-fashion retail brand, called F21 OpCo, LLC, has filed for Chapter 11 bankruptcy protection in a Delaware court. And while it plans to close its U.S. stores and hold going-out-of-business sales, there is still a chance for a sale that could keep some operations running. For now, Forever 21 stores and its website will stay open as the company sells off inventory and looks for buyers. The move mirrors a similar one made recently by Joann, the beloved arts and fabric chain, which had initially hoped to keep its stores operating before ultimately deciding to liquidate and shut its doors for good. Like Joann, Forever 21 is now in its second bankruptcy; it also filed for Chapter 11 protection in 2019, just months before the pandemic. What happens next for Forever 21? The apparel retailer is seeking a buyer to keep parts of the business alive rather than shutting down completely, although there’s no guarantee that will happen. As Forever 21 explained in a press release, “In the event of a successful sale, the Company may pivot away from a full wind down of operations to facilitate a going-concern transaction.” This means that if someone buys the business, Forever 21 might not shut down completely. Fast Company has reached out to Forever 21 for comment. The company has faced increasing competition from cheaper and faster brands, in particular China-based Temu and Shein. Forever 21 inked a deal with the latter of those brands in 2023 that would allow its clothes to be sold on the platform. In addition to competition, the company also cited rising costs and changing shopping habits as reasons for its precarious financial situation. Once a go-to store for trendy, affordable fashion, Forever 21 has struggled to keep up with online retailers and brands that move faster in the digital world. Forever 21’s international stores, which are run by different companies, are not affected by the bankruptcy. But in the United States, the future of Forever 21 depends on whether a buyer steps in. If not, this could truly mark the end of a fast-fashion era.
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E-Commerce
Getting an idea of how much a dental visit is going to cost can be difficult, even if its staring you straight in the mouth. One company hopes to change that, using artificial intelligence to give patients and dentists real-time cost estimatesall while the drills are still buzzing and fluoride is flowing. Overjet, a dental AI platform, just launched the Dental Clarity Network, a collaboration of dentists and health insurance providers that aims to give more clarity into dental billing. The first initiative of the Network is the deployment of ReviewPass, a program that helps deliver real-time cost estimates and insurance coverage information related to tons of dental procedureseffectively, helping dental patients avoid surprise bills that they werent expecting. Put another way, if youve ever found yourself at the dentist, and an issue is discovered that needs to be remediedbe it a filling, or something elseyou may not have any idea if your insurance will cover it, or how much youll be on the hook for, out of pocket. Yet, the work needs to be done, so you may tell the dentist to go ahead and do it, and then wait weeks for a bill to arriveor not. Thats what ReviewPass is hoping to clear up. The idea ropes in dentists (care providers), patients, and insurers, leveraging AI to quickly figure out if a procedure is covered under a patients insurance plan, and get an idea of how much everything will cost. This, as opposed to the dentist and insurer going back and forth for weeks, all while the patient waits in the dark with a sore jaw. The Dental Clarity Network is launching with some big partners on board, too. Including insurers like MetLife and Humana, and the Dental Care Alliance, which comprises more than 400 dental practices in 24 states. Overall, Overjet estimates that ReviewPASS should be able to reach more than 100 million dental patients in the U.S. What were introducing is a group of major dental payers and provider groups coming together to work on reducing costs and providing more clarity to patients, says Wardah Inam, Overjets CEO. What weve done is help payers build out the infrastructure for real-time claims to happen. While the patient is in the chair, theyll know whether a treatment must be covered, she says. The root of the issue is that most dentists dont know, off the top of their heads, the intricacies of each dental insurance plan. And, as such, cant tell a patient with certainty whether a specific treatment or procedure is covered by their plan. So, many times, they simply do the procedure, and then go back and forth with the insurer to determine whether it was covered by the plan, or if they need to bill the patient and have them pay out of pocket. People dont realize how much time payers and providers waste talking to each other, says Inam. It eats up a lot of time and money, inflating costs. As a result, Inam thinks that Overjet will help significantly reduce costs for insurers and providers, which might trickle down to patients. But a big question: Why the sudden urge to increase transparency into pricing, particularly from insurers, who tend to benefit from opaque billing practices? Inam says its because, over the long run, the potential cost-savings are too much to ignore. Everybody should win: Dentists and insurers reduce administrative and overhead costs, and patients get more clarity on what procedures may be covered or not covered, and how much theyre ultimately staring at in terms of dental bills. And once dentists and patients get a taste of it, Inam thinks itll be a game-changer. Its the first step, she says. When individuals have frictionless experiences, they dont go back. Once they start getting real-time information about their bills, theyre not going back.
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E-Commerce
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