Tariffs Could Add $3B to $4B to the US Home Building Costs

NAHB.org
January 27, 2025
Category: Finance & Economics
Region: Canada, United States, International

Scarcity and an acute, sustained rise in building material costs — from softwood lumber to distribution transformers — are driving up the cost to construct homes and harming housing affordability. There are several factors driving this trend, notably inflationary pressures and global factors, including trade uncertainty. …A tariff is essentially a tax on an imported good, meaning the importer pays an additional cost for importing such an item. …So tariffs on building materials raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices. Two essential materials used in new home construction, softwood lumber and gypsum (used for drywall), are largely sourced from Canada and Mexico, respectively. Proposed new tariffs on China, Canada and Mexico are projected to raise the cost of imported construction materials by $3 billion to $4 billion, depending on the specific rates.

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