At midnight on August 7, 2025, President Donald Trump’s latest global tariffs went into effect.
• Trump placed a 35% tariff on all non-Canada-United States-Mexico-Agreement (CUSMA)-compliant Canadian exports
• Canadian softwood lumber, one of the country’s notable exports to the United States, has been a critical part of the overall tariff discussion
• Last Friday, Canadian softwood lumber tariffs jumped from just over 14% to 35.19%
• Tariffs can worsen the already heavy housing affordability crisis
Why it Matters: American builders depend on Canadian lumber to produce new homes. A large tariff increase means new home costs will rise, and new homeowners will pay more.
Breaking Down the Numbers
• Canada supplies roughly 30% of the U.S. softwood lumber market
• U.S. tariffs on Canadian lumber have more than doubled this summer
• According to Kyle Peacock, founder of Peacock Tariff Consulting, every $1,000 increase in framing lumber adds roughly $3,000–$4,000 to the final sale price of a home.
• “Softwood lumber (used for framing, roof trusses, flooring systems, and other structural elements) is a fundamental input in residential construction, Peacock said.
What This Means for Homebuyers
If you’re ready to buy a new home, you’ll want to act as soon as possible. Tariff increases lead to instant effects for American homebuilders, according to Peacock.
1. Home prices will rise now. “When tariffs rise, U.S. builders typically see immediate cost increases for framing lumber. These aren’t theoretical increases; they show up directly in bids, purchase orders, and supplier contracts,” he said.
2. Prices could go up depending on square footage. “Homebuyers could see price tags rise by $5,000 to $10,000 or more depending on square footage, complexity, and regional sourcing availability,” Peacock said. “Larger homes and custom builds could be hit harder. If these elevated duties persist into 2027, analysts project cumulative cost increases up to $14,000–$20,000 per home.”
3. Some regions will be hit harder than others. “In highly tariff-exposed areas such as the Northeast or Pacific Northwest, the impact could be even steeper,” Peacock said. Peacock broke down the segments of the country this way:
Northeast, Great Lakes, Pacific Northwest: Heavy reliance on Canadian imports due to proximity and mill ties. Expect sharper cost hikes.
Southeast: More local sawmills and domestic supply (especially Southern Yellow Pine) may cushion the blow. But rising national prices can still push local costs up.
High-cost urban metros (Boston, San Francisco, Seattle): Less room to absorb higher material prices. Some rural builders may be more flexible but lack supply options.
Remote or fast-growing markets (parts of Texas, Colorado, Arizona): Long-haul delivery disruptions could spike costs further due to scarcity and freight charges.
Nationwide prices will rise, but high-import areas may see 1.5 to 2 times more impact than regions with stronger domestic supply.
The Builders' Take on Lumber Tariffs
The National Association of Home Builders (NAHB) strongly disapproves of lumber tariffs, citing the damage they cause to housing affordability. The tariffs act as a tax on U.S. builders, home buyers, and consumers, raising prices for all involved.
With affordability near historic lows, the NAHB has implored the Trump administration to consider how higher tariffs on softwood lumber push up housing costs and limit supply. The NAHB is also calling for immediate talks with Canada on a new softwood lumber agreement to create a reasonable solution, and a potential removal of all tariffs.
The bottom line: With a monstrous rise in Canadian softwood lumber tariffs, prices are expected to rise for American homebuyers. Now might be the best time for new homebuyers to strike, before the prices increase.
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