Tariffs to add as much as $10,000 to cost of average new home, trade group

President Donald Trump‘s tariffs could increase material costs for the average new home by as much as $10,000, according to the National Association of Home Builders.

The trade group said it has received anecdotal reports from members that Trump’s plan for levies would raise material prices by between $7,500 and $10,000 for the average new single-family home. While the association is planning a formal survey in the future, this figure offers an early glimpse of what businesses and consumers can expect if Trump’s controversial taxes on Canadian and Mexican imports go forward as planned.

“For years, NAHB has been leading the fight against tariffs because of their detrimental effect on housing affordability,” the association wrote in a blog post published last week. “In effect, the tariffs act as a tax on American builders, home buyers and consumers.”

Trump last week delayed 25% tariffs for some Canadian and Mexican imports by a month after implementing them just days earlier, a stunning reversal amid financial market turmoil. His additional hike to levies on China, which lifted duties on that nation’s goods to 20%, went forward.

The NAHB said softwood lumber is mainly sourced from Canada, while gypsum, a component of drywall, comes primarily from Mexico. Other materials like steel and aluminum — in addition to completed home appliances — are imported to the U.S. from China, the group said.

An implementation of the 25% tariff on Canada and Mexico as previously laid out by Trump would raise total costs for imported construction materials by more than $3 billion, according to the NAHB.

Homebuilders have had to respond to analysts and investors wondering what these taxes could mean for their bottom lines. The SPDR S&P Homebuilders ETF (XHB) has tumbled more than 22% from highs seen in late November as uncertainty rattled investors.

For D.R. Horton, around 20% of lumber is estimated to come from Canada. The Texas-based firm, like others, has made strides in recent years to shift supply chains away from China coming out of the Covid pandemic. But it still has to contend with the possibility of new taxes on components coming from Mexico, said Jessica Hansen, head of investor relations.

Tallying a total impact is difficult given the potential for Trump’s policy to change and a lack of clarity about how much of certain products are imported, Hansen said at a Barclays conference last month.

There’s “really no way to proxy what that could ultimately cost, but we’ll navigate it like we do anything,” Hansen said. “If we’ve got a cost category that’s inflating and we’re in a gross margin compressing environment, we’re going to renegotiate anything and everything that we can.”

There can also be a knock-on effect for builders that don’t rely as much on…