Powell Says Tariffs and Immigration May Be Slowing Homebuilding

© Bloomberg. A worker saws a section of lumber inside a home under construction at the M/I Homes Inc. Bougainvillea Place housing development in Ellenton, Florida, U.S., on Thursday, July 6, 2017.

(Bloomberg) — The U.S. housing shortage has the attention of Federal Reserve Chairman Jerome Powell.

Homebuilders are being held back by a “series of factors,” including higher materials costs, a skilled-labor shortage and President Donald Trump’s immigration and tariffs policies, Powell said during a Senate Banking Committee hearing Thursday.

“What we hear from the homebuilders is that it’s a series of factors that are really holding them back and driving and challenging affordability,” Powell said in response to a question by Democratic Senator Tina Smith of Minnesota.

Powell said that tougher immigration policies may be in part to blame for the difficulty in finding workers, and tariffs also drive up costs.

“Material costs too have gone up, and some of that is tariffs, for sure,” he said. “The homebuilders feel almost like they’ve been hit by a perfect storm.”

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