Tariffs continue to impact homebuilders and remodelers. Since this spring, tariffs have increased the price of imported materials essential to constructing a home. These increased costs for building a home slow construction even further as the housing shortage continues to grow, raising rents and home prices.
In October 2025, a 10% tariff on timber and lumber and a 25% duty on cabinets and furniture were implemented. At the start of this year, these have increased to 30% for wooden furniture and 50% for kitchen cabinets and vanities.
According to Realtor.com, the U.S. imports roughly one-third of the lumber used in home construction, 85% of which comes from Canada. This Canadian lumber is already subject to a 35% tariff in addition to the newly imposed 10% tariff.
These increasing input costs—combined with local zoning requirements, regulatory mandates, and high interest rates—push homeownership further out of reach. The National Association of Realtors’ 2025 annual survey found the median age of a first-time buyer has reached an all-time high of 40 years old, while the share of first-time homebuyers hit a record low at 21%.
Though these tariffs are aimed at boosting domestic timber production, as U.S. sawmills are operating at 64% of capacity. This has steadily decreased since 2017, according to the National Association of Home Builders (NAHB). At this rate, it would take years to meet current demand, let alone ramp up production enough to make a dent in the housing shortage.
An analysis by NAHB broke down the cost of building a single-family home, finding that framing costs averaged just below $50,000 last year, or 12% of the total cost of building a new home. Cabinets and countertops account for 4.5% of the total cost, around $19,056 on average. Homebuilders can expect these numbers to increase as tariffs are put into effect.
Other materials used in homebuilding may also be subject to new tariffs, including gypsum, steel, and aluminum. In February, President Trump reinstated a 25% tariff on steel imports and increased tariffs on aluminum imports to the same level. A tariff on the mineral gypsum, which is used in drywall, may be imposed in the future. This tariff would be imposed under the International Emergency Economic Powers Act (IEEPA), which is currently before the Supreme Court with questions about the constitutionality of its application.
Residential building permits have continued to decrease over the past few years, even before tariffs were part of the conversation. The U.S. is short millions of homes, with estimates ranging from a deficit of 3 to 5 million units. This shortage is impacting every corner of the market; multifamily development has slowed as rents and the number of cost-burdened renters are reaching record highs.
Although the Trump administration has supported programs that are beneficial to homebuyers and builders, such as expanding the Low-Income Housing Tax Credit and investing in infrastructure to encourage new construction, these efforts are not enough to increase residential construction in a meaningful way, given the sharp rise in building costs.
Various costly mandates, local regulations, and high interest rates are already negatively impacting homebuilders. With every added cost, more potential homebuyers are priced out.