Des Moines Metro Homebuilders Worry Steel, Aluminum Tariffs Will Smother Sales Recovery

Philip Joens and Kevin Baskins • Des Moines Register • February 27, 2025

Des Moines metro homebuilders were optimistic at the beginning of 2025, with home sales leveling off after a long decline as consumers showed signs of adapting to higher prices and interest rates in the wake of the COVID-19 pandemic.

They were even more encouraged when President Donald Trump on his first day in office signed an executive order aimed at reducing the cost of housing and increasing housing supply. Iowa needs at least 24,617 housing units to be built by 2030, according to the Iowa Finance Authority.

Now, though, the builders are worried that Trump’s planned tariffs on imported steel and aluminum could increase the costs of building homes and smother the hoped-for recovery.

“They’re really doing a rough job of mitigating any positive effects that might have had,” said Chris Pickard, president of Ankeny’s Sage Homes and board president of the Home Builders Association of Greater Des Moines.

Trump has announced he will enact the surcharges March 12, touting them as a boost for domestic makers of the metals.

The tariffs will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the U.S. duty free under special carveouts in federal trade regulations.

It’s welcome news for domestic producers, who may also be able to raise their prices while still undercutting international suppliers.

“Tariffs are a powerful tool to fight against unfair trade and state-sponsored overcapacity around the world and compel other nations to take a serious approach to fair trade,” Philip Bell, president of the Washington-based Steel Manufacturers Association, said in a statement.

But Jenna Kimberley, CEO of Ankeny home builder Kimberley Development, said the tariffs could be “terrible for our industry.”

“Those 25% tariffs, construction and manufacturing bear that burden the most,” Kimberley said.

Pickard said the potential disruption comes at an especially inopportune time, giving buyers who were getting comfortable with market conditions a new reason to hesitate on home purchases.

“The biggest impact it has on our industry here in central Iowa is the threat of instability,” he said. “That makes not only homebuilders unsure of what they’re putting in. It makes consumers afraid to pull the trigger.”

“We’re very concerned because especially in this high-interest rate environment, to add tariffs on top of that is tough,” Kimberley said.

What are steel and aluminum used for in homes?

Kimberley’s company is seeking to cash in on what has been a surge in sales of high-end homes in the metro, building a $3.3 million “spec” home in West Des Moines.

Her father, company founder Bill Kimberley, wants to use the speculative home project, the costliest built on record built in Des Moines without a specific buyer in mind, to show off the new development south of Jordan Creek Town Center and gauge the market for a readymade, top-of-class property that offers the advantage of quick occupancy.

The home gleams with premium wood covering the walls and floors. But its backbone is steel.

“There’s a huge steel beam and steel columns on each end of this to span this because it’s beyond what wood can do,” Bill Kimberley said as he stood in the living room. “There’s tons of (rebar) steel that goes in the foundation and the footings.”

Even in more modest homes, steel and aluminum are in “tons of areas that you don’t even think about,” Pickard said. All air conditioning and heating duct work is made from metal, Jenna Kimberley said. So are most appliances, fireplaces, air conditioning units and furnaces.

“These tariffs will directly affect construction costs,” Bill Kimberley said. “I hate the thought of our costs continuing to rise, but I don’t see any way around it. … There’s aluminum and steel in all kinds of products.”

Price increases could trickle down to consumers in unexpected ways. For example, manufacturers, like vinyl siding makers, use aluminum machinery to make their products, Pickard said.

“The consequences of any kind of tariff are so much more far-reaching than anybody can even comprehend,” he said. “The impacts, you end up feeling them for a long time.”