T
ariffs on Canada and Mexico, major suppliers of construction materials, took effect March 4 after a 30-day pause. This has created uncertainty for builders, who are bracing for increased costs. The tariffs could add thousands to the cost of a new home, with experts estimating that the overall cost of building materials may soar by 10% in the next 12 months.

    The White House claimed that Canada and Mexico failed to address border security concerns, but both countries have refuted this claim. In response, Canada has imposed retaliatory tariffs on $155 billion worth of U.S. goods, while Mexico is expected to follow suit. China has also increased its tariffs on U.S. goods, doubling the rates imposed last month.

    The National Association of Home Builders had expressed concerns about the impact of tariffs on the home construction industry, citing Canada and Mexico as major suppliers of essential building materials like softwood lumber. New home starts have already begun to decline, and builder confidence has dipped after climbing for five months. The uncertainty surrounding tariffs could dampen market momentum in 2025.

    While President Trump has pledged to increase U.S. timber production to offset domestic reliance on lumber imports, this could take time – potentially three years. In the meantime, tariffs could add $7,500 to $10,000 to the cost of building each new home, according to experts.