Housing Market Faces Fresh Uncertainty Despite Trump’s Lumber Tariff Relief | Fingerlakes1.com (2025)

Canadian Lumber Gets a Pass—But Other Materials Could Drive Prices Higher

The U.S. housing market just got a temporary boost from Donald Trump’s latest tariff decision—but experts say the relief may be short-lived. While the exemption of Canadian lumber from sweeping new tariffs is a win for homebuilders, broader tariff policies are still poised to raise construction costs across the board.

The National Association of Home Builders (NAHB) warns that tariffs on key imports like steel, copper, and concrete could add more than $10,000 to the average price of a new home—even with the lumber carveout.

What Trump’s Tariffs Mean for the Housing Market

Last week, former President Donald Trump announced a 10% baseline tariff on nearly all U.S. trading partners, with some duties surging to as high as 50% on targeted countries like China. However, Canada and Mexico were excluded, sparing the U.S. from immediate price hikes on softwood lumber—85% of which is sourced from Canada.

“NAHB is pleased President Trump recognized the importance of critical construction inputs,” said NAHB Chairman Buddy Hughes.

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But this narrow exemption is just one piece of a much larger puzzle. The broader scope of the tariffs affects a wide range of building materials, which builders say will lead to higher costs and fewer affordable housing options.

Builders Warn of Rising Costs Despite Lumber Exemption

According to the March 2025 NAHB/Wells Fargo Housing Market Index:

• Tariffs have already added $9,200 to the average new home cost.
• New tariffs on imports from Asia and Europe could push that number even higher.
• Prices for building materials have surged 34% since 2020, far outpacing inflation.

Tariff-Impacted Materials Include:

“Prices are going to move higher—no question,” said Kevin Thompson, CEO of 9i Capital Group. “Builders aren’t eating those costs. They’re passing them straight to the buyer.”

What It Means for Buyers and Sellers

Despite mortgage rates ticking down slightly—from high-6% to mid-6%—thanks to falling Treasury yields, many buyers are still priced out.

Fixer-uppers and investment properties are hit especially hard:

• Investors are offering 70–75 cents on the dollar, down from 80% last year.
• Lenders are tightening loan-to-value ratios due to higher risk.
• Repair costs are up across the board, reducing investor margins.

“If you’re hoping for that 2024 cash offer, that window already closed,” warned one real estate investment firm.

Regional Housing Markets Are Reacting Unevenly

The national housing inventory remains 20% below pre-pandemic levels, but regional trends are shifting:

• 58 of 200 markets now exceed 2019 inventory levels.
• Softening is most pronounced in Sun Belt boomtowns like Cape Coral, FL, and San Antonio, TX.
• Builders in these regions are cutting prices or offering incentives, cooling the broader resale market.

Meanwhile, Midwest and Northeast markets—which didn’t see the same pandemic-driven demand spikes—remain tighter, keeping sellers in a stronger position.

The Road Ahead: More Disruption Expected

The new tariff policies are set to take effect later this month. NAHB expects further price hikes on essential components like:

• Fixtures
• Copper wiring
• HVAC units

“It gets worse before it gets better,” said Thompson. “Think stagflation—rising unemployment, higher prices, and lower GDP.”

Key Takeaways:

• Trump’s lumber tariff exemption is helpful but limited in scope.
• Tariffs on other materials could drive home prices even higher.
• Sellers must adjust to a market with shrinking investor offers.
• Regional housing dynamics continue to shift based on affordability and supply.

Stay Informed as the Housing Market Shifts

Homebuyers, sellers, and real estate professionals should monitor tariff impacts and regional inventory trends closely. As the housing market recalibrates in real time, pricing strategies and investment decisions must adapt to stay competitive.