In the market for a new home or planning a renovation? Get ready to dig deeper into your pockets. The Trump administration's tariffs on imports from Canada, Mexico, and China are driving up the cost of building materials for new home construction and remodeling projects. This increase is expected to add $7,500 to $10,000 to the cost of building a single-family home in the U.S., according to the National Association of Home Builders. This added cost is usually passed on to homebuyers, potentially dampening demand in a sluggish housing market.

We Buy Houses in San Francisco, a company that buys foreclosed homes and flips them, is raising prices on its renovated properties by 7% to 12%. Despite saving on costs by stockpiling more Canadian lumber than usual, the company is still facing price hikes due to the uncertainty surrounding the tariffs.

These tariffs are hitting the housing market at a bad time, as it is the busiest season for sales. The fear of a trade war has caused economic concerns, leading potential buyers to wait on the sidelines. Rising material costs are forcing builders to decide between passing the expenses to consumers, resulting in higher home prices, or cutting back on materials, which could mean smaller homes.

While the White House has delayed tariffs on some products, the costs of building materials, including lumber, continue to rise. This increase in prices is already impacting construction projects. For example, a building supplier in New York sourced materials from Canada at a lower cost than the American alternative. However, with tariffs looming, costs are set to rise significantly, affecting both suppliers and customers.