The National Association of Home Builders recently reported that Canada and Mexico have been excluded from President Trump’s 10% baseline tariffs on all of America’s trading partners. This is a huge win for homebuilders as Canada currently supplies 85% of all U.S. softwood lumber imports and accounts for nearly a quarter of the available supply in the U.S. The exemption on Mexican goods is also beneficial due to major construction imports like gypsum, concrete and near-shored appliances.

In an official statement to the media, NAHB Chairman Buddy Hughes said:

“While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs. However, NAHB is pleased President Trump recognized the importance of critical construction inputs for housing and chose to continue current exemptions for Canadian and Mexican products, with a specific exemption for lumber from any new tariffs at this time.”

There are still challenges in the lumber acquisition process given the current anti-dumping and anti-subsidy investigation that is ongoing by the Department of Commerce on Canadian lumber imports and the ongoing national security investigation into imported lumber and timber. However, President Trump’s choice to not pile more tariffs on top of existing ones is crucial for homebuilders to be able to afford lumber. The Canadian lumber tariff rate remains 14.5%, but that is likely to increase later in the year.

What does this all mean for homebuilders? While the lumber tariff exemption is a major financial win, manufacturers and suppliers will be impacted differently. Expect more volatility in pricing while companies adjust to these differences.

In the meantime, NAHB plans to continue its advocacy for lower tariffs on lumber, as well as other crucial building materials.

How Tariffs Impact the Homebuilding Process

Tariffs on building materials act as a tax on American builders, home buyers and consumers. Due to these recent tariffs, builders are estimating an average cost increase of $9,200 per home, according to the March 2025 NAHB/Wells Fargo Housing Market Index. It is also expected that building materials will become scarcer, thus increasing the cost to build new homes even more.

NAHB estimates that approximately 7.3% of all goods used in new residential construction originated from a foreign nation in 2024, so when the president’s global action on tariffs go into effect later this month, costs will rise for steel, aluminum, copper and home appliances. In simpler terms, everything you need to build a home will likely become more expensive in the next few months. The typical cost of building materials for a new single-family home is $174,155 and imports account for approximately 12,713 of that cost.