Tariffs on lumber and appliances set stage for higher costs on new homes
and remodeling projects
[March 18, 2025] By
ALEX VEIGA and MAE ANDERSON
Shopping for a new home? Ready to renovate your kitchen or install a new
deck? You'll be paying more to do so.
The Trump administration’s tariffs on imported goods from Canada, Mexico
and China — some already in place, others set to take effect in a few
weeks — are already driving up the cost of building materials used in
new residential construction and home remodeling projects.
The tariffs are projected to raise the costs that go into building a
single-family home in the U.S. by $7,500 to $10,000, according to the
National Association of Home Builders. Such costs are typically passed
along to the homebuyer in the form of higher prices, which could hurt
demand at a time when the U.S. housing market remains in a slump and
many builders are having to offer buyers costly incentives to drum up
sales.
We Buy Houses in San Francisco, which purchases foreclosed homes and
then typically renovates and sells them, is increasing prices on its
refurbished properties between 7% and 12%. That's even after saving
$52,000 in costs by stockpiling 62% more Canadian lumber than usual.
“The uncertainty of how long these tariffs will continue has been the
most challenging aspect of our planning,” said CEO Mamta Saini.
Bad timing for builders
The timing of the tariffs couldn’t be worse for homebuilders and the
home remodeling industry, as this is typically the busiest time of year
for home sales. The prospect of a trade war has roiled the stock market
and stoked worries about the economy, which could lead many would-be
homebuyers to remain on the sidelines.
“Rising costs due to tariffs on imports will leave builders with few
options,” said Danielle Hale, chief economist at Realtor.com. “They can
choose to pass higher costs along to consumers, which will mean higher
home prices, or try to use less of these materials, which will mean
smaller homes.”
Prices for building materials, including lumber, have been rising, even
though the White House has delayed its tariffs rollout on some products.
Lumber futures jumped to $658.71 per thousand board feet on March 4,
reaching their highest level in more than two years.
The increase is already inflating costs for construction projects.
Dana Schnipper, a partner at building materials supplier JC Ryan in
Farmingdale, New York, sourced wooden doors and frames for an apartment
complex in Nassau County from a company in Canada that cost less than
the American equivalent.
Half the job has already been supplied. But once the tariff goes into
effect it will be applied to the remaining $75,000, adding $19,000 to
the at-cost total. Once JC Ryan applies its mark up, that means the
customer will owe $30,000 more than originally planned, Schnipper said.
He also expects the tariffs will give American manufacturers cover to
raise prices on steel components.
“These prices will never come down,” Schnipper said. “Whatever is going
to happen, these things will be sticky and hopefully we’re good enough
as a small business, that we can absorb some of that. We can’t certainly
absorb all of it, so I don’t know. It’s going to be an interesting
couple of months.”
Sidestepping the tariffs by using an alternative to imported building
materials isn’t always an option.
Bar Zakheim, owner of Better Place Design & Build, a contracting
business in San Diego that specializes in building accessible dwelling
units, or ADUs, said Canada remains the best source for lumber.
By sticking with imported lumber, Zakheim had to raise his prices about
15% compared with a year ago. He also has 8% fewer jobs lined up
compared with last year.
“I’m not about to go out of business, but it’s looking to be a slow,
expensive year for us,” he said.
Tariffs rollercoaster
On March 6, the Trump administration announced a one-month delay on its
25% tariffs on certain imports from Mexico and Canada, including
softwood lumber. Tariffs of 20% on imports from China are already in
effect. A 25% tariff on steel and aluminum imports — 50% on those from
Canada — kicked in on March 12.
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Lumber is piled at a housing construction site, Thursday, June 24,
2021, in Middleton, Mass. (AP Photo/Elise Amendola, File)
 Tariffs on Mexican and Canadian
goods slated to go into effect next month will raise the cost of
imported construction materials by more than $3 billion, according
to the NAHB. Those price hikes would be in addition to a 14.5%
tariff on Canadian lumber previously imposed by the U.S., ratcheting
up tariffs on Canadian lumber to 39.5%.
On Air Force One, President Donald Trump said he was pushing forward
with his plans for tariffs on April 2 despite recent disruption in
the stock market and nervousness about the economic impact.
“April 2 is a liberating day for our country,” he said. “We’re
getting back some of the wealth that very, very foolish presidents
gave away because they had no clue what they were doing.”
Building materials costs overall are already up 34% since December
2020, according to the NAHB.
Builders depend on raw materials, appliances and many other
components produced abroad. About 7.3% of all products used in
single-family home and apartment building construction are imported.
Of those, nearly a quarter come from Canada and Mexico, according to
the NAHB.
Both nations also account for 70% of the imports of two key home
construction materials: lumber and gypsum. Canadian lumber is used
in everything from framing to cabinetry and furniture. Mexican
gypsum is used to make drywall.
Beyond raw materials, refrigerators, washing machines, air
conditioners and an array of other home components are manufactured
in Mexico and China, which is also a key source of steel and
aluminum.
The tariffs will mean higher prices for home improvement shoppers,
said Dent Johnson, president of True Value Hardware, which operates
more than 4,000 independently owned hardware stores.
“The reality is that many products on the shelves of your local
hardware store will eventually be affected,” he said in a statement
emailed to The Associated Press.
Chilling effect
Confusion over the timing and scope of the tariffs, and their impact
on the economy, could have a bigger chilling effect on the new-home
market than higher prices.
“If consumers can’t plan, if builders can’t plan, it gets very
difficult to know how to price product because you don’t know what
price you need to move it,” said Carl Reichardt, a homebuilding
analyst at BTIG. “If people are worried about their jobs, worried
about the future, it’s very difficult to make the decision to buy a
new home, whatever the price.”
The uncertainty created by the Trump administration’s tariffs policy
will probably result in increased volatility for home sales and new
home construction this year, said Robert Dietz, the NAHB's chief
economist.
Still, because it can take several months for a home to be built,
the larger impact of from building materials costs are going to
happen “down the road,” Dietz said.
The impact tariffs are having on consumers is already evident at
Slutsky Lumber in Ellenville, N.Y.
“There are not as many people getting ready for spring like they
usually are,” said co-owner Jonathan Falcon. “It seems like people
are just cutting back on spending.”
Falcon also worries that smaller businesses like his will have a
tough time absorbing the impact of the tariffs.
“This is just like another thing that’s going to be harder for small
lumber yards to handle than the big guys and just sort of keep
driving businesses like us to not make it,” he said.
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Reporter Anne D'Innocenzio contributed.
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