New tariffs are set to increase the cost of building, buying, and renovating homes—creating another barrier in an already tough housing market. NewHomeSource, a new home listings site with customer reviews, breaks down how tariffs will impact homebuyers.
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 New Home Source chief economist Ali Wolf.
What’s happening: The U.S. government is imposing tariffs up to 25% on key goods from Mexico and Canada. Goods from China were temporarily rolled back from 145% to 30% as of May 14, 2025, for a span of 90 days. On June 11, President Donald Trump said the U.S. and China reached an agreement, with tariffs on Chinese imports set at 55%.
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Lumber: A 25% tariff on Canadian goods adds to an existing 14.5% duty, raising softwood lumber prices by nearly 40%.
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Concrete, cement, gypsum: About 25% of the U.S. supply is imported, mainly from Canada and Mexico.
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Steel and aluminum: Both materials, essential for framing and roofing, are now subject to a 25% tariff.
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Appliances and fixtures: Many products are sourced from China, with price increases expected.
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Higher material costs are often passed directly to consumers.
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Industry experts say construction costs could rise 4% to 6%.
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That adds $5,000 to $20,000 to the price of a new home.
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Builders surveyed by the National Association of Home Builders in March estimate a smaller, but still notable, $9,200 increase.
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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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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 the cost only rising by $5,000.
