New tariffs are set to increase the cost of building, buying, and renovating homes—creating another barrier in an already tough housing market.
Why it matters: With high mortgage rates and low inventory, homebuyers are already struggling. Now, tariffs will raise prices even further.
“A lot of the uncertainty [in the housing market] comes down to tariffs,” says NewHomeSource chief economist Ali Wolf.
What’s happening: The U.S. government is imposing tariffs of 35% on Canada, and 25% upon Mexico. Meanwhile, tariffs for key Chinese goods are at 30%.
See More: Here’s How Trump’s Tariffs May Affect Home Insurance Prices in 2025
Key materials affected by tariffs:
• Lumber: Canadian softwood lumber is now tariffed at a rate of more than 35%.
• Concrete, cement, gypsum: About 25% of U.S. supply is imported, mainly from Canada and Mexico.
• Steel and aluminum: Essential for framing and roofing, went from a 25% tariff to a whopping 50% in early June
• Appliances and fixtures: Many are sourced from China, with price increases expected.
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Impact on homebuyers:
Higher material costs are often passed directly to consumers.
Industry experts say construction costs could rise 4–6%
That adds $5,000 to $20,000 to the price of a new home
Builders surveyed by the National Association of Home Builders estimate a smaller, but still notable, $9,200 increase
Todd Tomalak, Zonda’s principal, advisory of building products, says “including a 2.5% baseline rate [of inflation], tariffs could increase the cost of building materials by 9%.”
First-time buyers and those looking for affordable homes will feel it most.
“We’re in an environment where affordability is stretched and we don’t want to be adding to any additional costs. Tariffs could play a role in making that worse,” says Wolf.
“The tariff impact isn’t isolated to just new homes, though,” adds Wolf. “If you are considering an existing home that needs to be remodeled, you might be surprised with how much money the whole project will cost.”
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Differing opinions on cost increases due to tariffs
The National Association of Home Builders’ April Housing Market Index estimates tariffs could add $10,900 to the cost of a typical new home. However, in Zonda’s Q2-2025 Housing Market Forecast, data points to cost only rising by $5,000.
Given the flux surrounding global tariffs, it’s difficult to predict a static number for the coming months.
Where prices are already increasing:
Manufacturers may continue to raise prices regardless of tariffs. Tomalak reports that the three major roofer manufacturers — Owens Corning, CertainTeed, and GAF — have already raised prices between 7 to 10% as of April 1.
Will tariffs affect other areas of a new home purchase such as insurance?
The short answer — probably yes.
“Tariffs on imported building materials will increase the cost of rebuilding a home, which will raise home insurance premiums,” says Insurify’s Matt Brannon.
See Also: How The Resale Market Can Help You Score a Better Deal on a New Home
The bottom line:
While homebuyers are already aware of the high prices of new homes, particularly in a post-COVID world, purchasers should prepare themselves for a new additional expense in the form of tariffs being applied to building products, fixtures, and appliances.
With additional reporting from Carmen Chai
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