Home Improvements on the Rise - and So Are Costs

What Homeowners Should Know About Tariffs and Financing in 2025

Why? Because rising tariffs are poised to drive up costs across the board—on both materials and labor—and they may even impact the cost of financing your project.

The Tariff Effect: What’s Changing?

With new tariffs taking effect and existing exemptions set to expire, homeowners could soon face significant increases in material costs. Here's how it breaks down:

• Steel and Aluminum Tariffs: A 25% tariff is already in place, impacting prices on HVAC equipment, appliances, metal roofing, water heaters, and framing hardware.
• Imported Fixtures and Cabinets: Many components used in kitchen and bath remodels—like faucets, sinks, vanities, and cabinets—are imported. With tariff rates climbing, those prices are already trending upward.
• Tile, Flooring, and Windows: Materials like ceramic tile, engineered flooring, vinyl, and windows (often imported from Canada, Mexico, or Asia) are all becoming more expensive due to new or reinstated tariffs.

For homeowners, this means that projects may cost more than initially planned, and the longer you wait, the more prices could climb.

Home Projects Most Affected

While no category is immune, here are the projects most likely to see a price hike:

• Heating & Cooling Upgrades: HVAC units and heat pumps, especially those with metal casings and imported components, are seeing price increases of 10–20%.
• Kitchen & Bath Remodels: Cabinets, countertops, lighting fixtures, and plumbing materials are now more expensive to source.
• Windows & Doors: Many units are made from imported parts or metals—expect costs to rise.
• Roofing & Siding: Metal roofing and composite siding products are hit especially hard by steel tariffs.
• Solar & Energy-Efficiency Upgrades: Equipment, panels, and insulation sourced globally may cost more as tariffs ripple through the supply chain.

Labor Isn’t Getting Cheaper Either

With inflation continuing to affect wages, contractor labor costs and insurance premiums are rising alongside materials. Delays in material deliveries due to supply chain disruptions may also mean your contractor needs more time—further increasing your project’s total price tag.

Impact on Loans and Financing

It's not just the cost of home upgrades that's going up—the cost to borrow may also rise:

• Interest Rates: While loan rates remain relatively affordable, further inflation pressures and economic uncertainty could lead to more increases. The Federal Reserve has signaled rate adjustments may continue.
• Loan Amounts: As project estimates grow, homeowners may need to borrow more than originally planned—sometimes pushing them into higher rate brackets or different loan products.
• Approval Challenges: Higher debt loads and tighter lending standards may impact approval odds, especially for unsecured or personal home improvement loans.

What Can Homeowners Do?

Here are a few smart steps to stay ahead of rising costs:

• Plan Early and Lock in Quotes: Contractors and suppliers may honor current pricing for a limited time—acting now could save you thousands.
• Secure Financing at Today’s Rates: Apply for a home improvement or energy-efficiency loan before interest rates or loan terms change.
• Prioritize Needs vs. Wants: Focus on essential upgrades—like heating, roofing, or energy efficiency—before aesthetic improvements.
• Consider a Home Equity Loan or Line of Credit (HELOC): These options may offer lower interest rates than unsecured loans and allow more flexibility.
• Work with Pre-Approved Contractors: Many programs—such as Payclipper or other vetted lending platforms—ensure your contractor meets standards, which can reduce risk and speed up project timelines.

Tariffs, supply chain challenges, and inflation are combining to create a more expensive home improvement landscape. Whether you're upgrading your heating or cooling system, remodeling your kitchen, or simply refreshing your space, it pays to be informed—and to act sooner rather than later.

Energy Credit Union is here to help you navigate the process with financing options that fit your goals and budget.