An executive order signed by President Trump would impose 25% tariffs on all goods from Canada and Mexico, as well as a 10% tariff on Chinese goods. After negotiations, the tariffs on Canada and Mexico were postponed until March 5. While these tariffs will likely impact the cost of everyday goods for American consumers, tariffs on building materials will also add pressure to the housing industry.  

The U.S. imports more than 70% of the softwood lumber and gypsum that homebuilders rely on from Canada and Mexico.
 Other building materials sourced from the countries impacted by tariffs include hardware, plumbing fixtures, glass and glass products, and household and electrical appliances. 

According to the National Association of Home Builders (NAHB), new duties on imports from these countries could raise construction costs by 3 to 4 billion dollars. The impact of this increase cannot be understated. With the existing housing shortage and high mortgage interest rates, these increased costs will discourage new development and price out even more consumers from homeownership. 

Elon Musk, who leads the newly created Department of Government Efficiency (DOGE), voiced his support for homebuilders on X (formerly Twitter), writing, “America is a nation of builders. Soon, you will be free to build.”

DOGE’s efforts to reduce government spending could have an impact on mortgage rates, but there are still questions surrounding the legality of the existence of DOGE and the role Musk has played within the federal government.