Trumps tariffs expected to raise new-home costs by $9,200

Homebuilders are responding to President Donald Trump’s new “Liberation Day” tariffs, and say that although the worst-case scenario was avoided, the new trade policy will inevitably raise the cost to build homes.Trump on Wednesday announced sweeping new tariffs on most major trading partners, stunning Wall Street and sending the stock market into a nosedive.Collectively, Trump’s trade moves bring the effective tariff rate on all imports to around 26%, up from 2.3% before he took office, according to an assessment from Capital Economics.“While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs,” says Buddy Hughes, chairman of the National Association of Home Builders.A recent survey of homebuilders found that they expect an average cost increase of $9,200 per home due to the recent tariffs.Tariffs are taxes on imported goods that must be paid by the company receiving the imports.If their construction costs rise, homebuilders could either try to pass the increase along to buyers or reduce their profit margins.

Builder margins are already under pressure, and if they are squeezed too much, construction activity could decline.Nationally, the median sales price for new single-family homes was $414,500 in March, according to U.S.Census Bureau data.While the new tariffs will increase construction costs for homebuilders, the majority of the U.S.

housing market is made up of previously owned homes.In March, about 18% of the homes listed for sale across the country were newly built, according to Realtor.com data.However, new construction plays an outsized role in certain states—and those are often places where housing is scarce and the need for additional housing is the strongest.In Idaho, a whopping 40% of active listings on the market last month were new builds, the highest share of any state.Behind Idaho were North Carolina (33% new constructio...