Prime Highlights:
Softwood lumber from Canada, gypsum from Mexico, and steel, aluminum, and appliances from China would be primarily impacted by the tariffs.
The NAHB warns that tariffs act as a tax on American builders, buyers, and consumers, potentially raising material costs by $7,500 to $10,000 per home.
Key Background:
The National Association of Home Builders (NAHB) has warned that proposed tariffs on certain Canadian and Mexican imports could increase the cost of materials for new homes by up to $10,000. The tariffs, if implemented, would primarily affect materials such as softwood lumber from Canada, gypsum from Mexico, and steel, aluminum, and home appliances from China.
The NAHB stated that the potential tariff increase could raise the price of an average new single-family home by between $7,500 and $10,000, citing early reports from industry members. These figures highlight the significant financial impact that trade policies, particularly tariffs, could have on the housing market. In a blog post, the NAHB reiterated its longstanding opposition to tariffs, emphasizing that they act as a de facto tax on American homebuilders, buyers, and consumers.
Last week, President Donald Trump temporarily delayed a 25% tariff on some imports from Canada and Mexico for one month. However, a separate increase in duties on Chinese goods, bringing them to 20%, was enacted as planned. Should the tariffs on Canadian and Mexican imports go ahead, the NAHB projects that the total cost of construction materials could rise by over $3 billion.
While some homebuilders, such as D.R. Horton, are working to shift supply chains away from China, the uncertainty surrounding these tariffs continues to affect investor confidence. The SPDR S&P Homebuilders ETF has fallen by more than 22% from its November peak, reflecting market concerns. Industry experts also warn of broader effects, including increased costs for domestically sourced materials due to shifting supply chain demands.
