The U.S. housing market faces new challenges as tariffs threaten to increase costs for home builders, renovators, and buyers. President Donald Trump’s import taxes on materials like lumber, stone, and metals could make new homes more expensive to build. Raw materials will likely become pricier, especially if proposed tariffs are implemented.
According to the National Association of Home Builders, the U.S. relies on lumber imports for about 30% of its domestic demand. Canada provides about 80% of U.S. softwood lumber imports. A new Commerce Department report indicated that import taxes on Canadian lumber could double this year.
Home renovators also face higher costs for fixtures, appliances, and plumbing. Several key housing materials are imported from places like China. Eli Moyal, founder and COO of renovation project tracking service Chapter, said clients could see project price increases of 10% to 15% from the tariffs.
Tariffs impact on housing costs
“Not everything is being put to the client, to the end of the funnel,” Moyal said. “The manufacturer takes some, the distributor takes some, the builder takes some, and then the client will see some increase in cost.”
Mortgage rates have already fluctuated due to the economic uncertainty.
Treasury yields have risen as investors price in tariff policies. The yield on the 10-year Treasury, a benchmark for mortgage rates, rose as high as 4.59% on Friday before retreating slightly. Mortgage rates generally follow the path of the 10-year Treasury yield and were up from around 6.7% a week earlier.
Phil Crescenzo Jr., vice president of Nation One Mortgage Corporation’s southeast division, said the uncertainty in borrowing is making it difficult for home buyers to finalize costs. If we’re trying to lock an interest rate within the last four business days, they could move by half a percent or three-quarters of a percent for the same cost in a four-day span,” Crescenzo said. That’s pretty significant.”
The tariffs add new pressures to a housing market that is already pricing out many buyers.
Housing market participants are bracing for increased costs as the market remains under pressure due to elevated import taxes and mortgage rates.
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