Tariffs to add as much as $10,000 to the cost of the average new home

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President Donald Trump’s tariffs could drive up material costs for the average new home by as much as $10,000, according to the National Association of Home Builders (NAHB).The trade group said it has received anecdotal reports from members suggesting that Trump’s proposed tariffs would increase material expenses by between $7,500 and $10,000 for a typical new single-family home. While the NAHB plans to conduct a formal survey, these early estimates offer a preview of the financial impact businesses and consumers may face if Trump’s tariffs on Canadian and Mexican imports proceed as intended.“For years, NAHB has been leading the fight against tariffs because of their detrimental effect on housing affordability,” the association wrote in a blog post last week.“In effect, the tariffs act as a tax on American builders, home buyers, and consumers.”Last week, Trump postponed a 25% tariff on select Canadian and Mexican imports by one month, reversing course shortly after putting them in place. However, his separate plan to raise tariffs on Chinese goods to 20% moved forward.According to the NAHB, softwood lumber is primarily imported from Canada, while gypsum—used in drywall—comes largely from Mexico. The group noted that other essential materials, including steel, aluminum, and finished appliances, are typically sourced from China.If the 25% tariffs on Canadian and Mexican goods were fully implemented as initially proposed, the total increase in imported construction material costs would exceed $3 billion, the NAHB said.Homebuilders respondHomebuilders have been fielding questions from analysts and investors concerned about the impact of new tariffs on their financial performance. The SPDR S&amp;P Homebuilders ETF (XHB) has fallen more than 22% since its highs in late November, as investor uncertainty has grown.For homebuilding giant D.R. Horton, around 20% of its lumber is estimated to come from Canada. The Texas-based company, like others in the industry, has worked to diversify supply chains since the COVID-19 pandemic, especially away from China. Still, the company could face new tariffs on components sourced from Mexico, said Jessica Hansen, head of investor relations.Assessing the full impact of Trump’s trade policy remains challenging, Hansen said at a Barclays conference last month, citing ongoing uncertainty and limited data on import volumes.“There’s really no way to proxy what that could ultimately cost, but we’ll navigate it like we do anything,” she said.“If we’ve got a cost category that’s inflating and we’re in a gross margin compressing environment, we’re going to renegotiate anything and everything that we can.”4o