Tariffs on construction materials, particularly from China, may raise new home prices by up to $10,000 with costs possibly passed to consumers.
ORLANDO, Fla. — Rising tariffs on construction materials could drive up the cost of new construction homes, adding pressure on homebuilders, buyers and sellers, the National Association of Home Builders said.
NAHB President Jim Tobin said new construction home costs could rise nationally between $7,500 to $10,000, with a median cost of about $9,000 despite the White House pausing country-specific tariffs on most nations for 90 days. The tariff on goods from China, however, was raised to 145%.
The NAHB said $204 billion in goods were used in U.S. home construction in 2024. Of that, $14 billion (or 7%) were imported, mostly from China, Canada and Mexico. China primarily imports electrical equipment, machinery and major appliances; Canada’s top imports are aluminum and lumber; and Mexico brings in appliances and gypsum — the key ingredient in wallboard.
“We’re anticipating higher material prices, which are either going to be absorbed by the builder or, most likely, they’re going to be passed along to the consumer in the form of higher prices, whether they’re buying an appliance or in the cost of that home that our members are going to build for them,” Tobin told CBS News.
At the same time, Tobin said President Donald Trump’s recent executive order calling for a 25% increase in timber production from federal lands will be “enormously helpful.” About 30% of lumber used in the U.S. is imported and about 80% of that is from Canada.
“If we could bring more of that production to those rural areas in the country, restart those sawmills and produce more of our lumber here, we would reduce our need for foreign lumber, and that’s a good thing in my mind,” he said.
Realtor.com found that in March about 18% of the homes listed for sale across the U.S. were newly built. The median sales price for new construction was $414,500 in February, according to U.S. Census Bureau data. In Florida, new construction homes make up 15% of the market.
Locally, the Northeast Florida Builders Association told Action News Jax in Jacksonville materials that include roof shingles and appliances are among those products likely to see price increases. Early estimates indicate direct construction costs could rise by $9,500 to $12,000 per home, but the ongoing fluctuations in tariff rates makes it difficult to pinpoint the exact impact, association President Seth Kelley said to reporter Jake Stofan.
“What we’ve been seeing in the residential construction industry is basically folks preparing for the worst, but not necessarily knowing where things are going to settle out,” Kelley said. “Upwards of 7 to 8% of what goes into a house is exclusively sourced from China and it could be things as small as a door hinge to things as significant as a microwave.”
While the White House last week backed off its tariffs on most nations for 90 days, most countries still face a baseline 10% import tax instead of the higher rates announced on April 2. As of Friday, China had countered the increased U.S. tariffs by imposing tariffs of 125% on U.S. goods.
Trump has said he wants to eliminate the $1.2 trillion trade deficit, which means he no longer wants the U.S. to import more goods than it exports to other nations. He also wants revenues from tariffs to offset his income tax cut plans. The president has also said he wants the tariffs to bring back factory jobs and raise workers’ wages.
The Associated Press contributed to this report.
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