As President Donald Trump imposes and threatens new tariffs on imports like lumber, steel and other essential building supplies, the U.S. housing market is bracing for a significant financial impact.
Much of what goes into making a U.S. home comes from outside the country. On March 4, Trump imposed 25% tariffs on goods from Canada and Mexico — many of which have since been delayed — while increasing tariffs on goods from China up to 20%. All steel and aluminum products coming into the U.S. are subject to 25% tariffs as of March 12. Starting April 2, the delayed tariffs against Canada and Mexico are set to be on again.
On top of all this, Trump has threatened further tariffs targeted at Canadian lumber, along with reciprocal action if other nations increase their own tariffs.
Canada, Mexico and China are America’s three largest trading partners. If all of the announced tariffs above on goods from these countries go into effect, members of the National Association of Home Builders (NAHB) expect building costs to rise on single-family homes by $7,500 to $10,000. Particularly painful would be added tariffs on imported Canadian lumber, the NAHB notes, which is already subject to 14.5% in duties.
These tariffs threaten not only to increase the price of new homes and renovations, but also to further strain the already limited supply of affordable housing.
Builders may now be forced to adjust their budgets, and extra costs passed directly onto consumers. This can be a serious blow to potential homeowners, especially those in the first-time buyer segment, where affordability is already a major issue.
The NAHB estimates about 7% of all goods used in new residential construction in the U.S. come from other countries. Two essential materials, however, are largely sourced from America’s neighbors to the north and south. Of $8.2 billion worth of sawmill and wood products imported in 2024, nearly 72% came from Canada. In addition, $481 million worth of lime and gypsum products were imported, with 74% coming from Mexico. Gypsum is used for drywall.
“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices,” NAHB chairman Carl Harris said in a news release reacting to Trump’s proposed tariffs against Canada and Mexico back in February.
