If the U.S. enacts new or increased tariffs on imported building materials, the cost of new home construction would rise significantly, affecting both builders and buyers. While exact cost increases depend on tariff rates, material dependencies, and supply chain adjustments, past trends and expert estimates provide useful benchmarks.
Projected Cost Increases by Material Type
• Lumber (30% imported, mostly Canada)
• 25% tariff on Canadian softwood (historical precedent) → Lumber prices rose 20-30%, adding $8K–$12K per home.
• Steel & Aluminum (40-50% imported)
• Tariffs of 25% on steel, 10% on aluminum (2018 impact example) → Increased structural and HVAC costs by ~5-10%.
• Estimated increase per home: $3K–$6K.
• Cement & Concrete (15% imported)
• 10-15% tariff on imported cement → Potential 2-5% increase in concrete costs.
• Estimated increase per home: $2K–$4K.
• Flooring & Tiles (70-80% imported)
• Tariffs on Chinese flooring materials (2019 example, 25%) → Raised flooring costs by 10-20%.
• Estimated increase per home: $3K–$7K (varies by home size and finishes).
• Plumbing Fixtures, Appliances, Windows, & Doors
• 25% tariff on Chinese imports (historical impact) → Increased costs of faucets, tubs, and appliances by 10-15%.
• Estimated increase per home: $5K–$10K.
• Electrical Components (70-80% imported)
• Tariffs on Chinese wiring, circuit breakers, etc. (historical impact) → Raised costs by 10-20%.
• Estimated increase per home: $2K–$5K.
Total Estimated Impact on New Home Cost
• Baseline new home cost: ~$450,000 (2024 average for a new single-family home).
• Projected increase from tariffs: $20K–$45K per home, depending on severity of tariffs and material sourcing.
• Percentage increase: 5%–10% on total home price.
Additional Economic Impacts
• Affordability Issues: Higher prices could push buyers out of the market, reducing demand.
• Supply Chain Adjustments: Builders may shift to domestic materials, but shortages could increase costs even further.
• Potential for Delays: Tariffs disrupt supply chains, extending construction timelines.
• Renovations & Remodeling Costs: Remodeling projects would also see 5-15% cost hikes, depending on materials used.
Bottom Line
If tariffs are enacted, new home costs could rise by $20K–$45K, making affordability even more challenging. Builders may adapt, but short-term impacts could lead to higher prices, slower sales, and supply chain disruptions. My thought: check-out the warehouse market, it has boomed since the November election as companies scramble to stock and store goods. Now only if shipping crates actually did make good housing...which, surprise, they don't.
