Homebuilders Resort to Desperate Measures as Tariffs Loom

Homebuilders are prepping for an industry doomsday: President Donald Trump’s tariffs.

Builders and contractors across the country told the Wall Street Journal they were accumulating materials or altering construction plans as the administration’s plan to tax imports takes shape, spelling concerns for heightened home prices

Some contractors are paying out of pocket to acquire lumber, steel and other materials before Trump’s tariffs are implemented. In addition to the money needed upfront to acquire the surplus of goods, builders also need to pay for places to store the excess materials.

While Trump aired tariffs ahead of his election victory in November, his broadside promises have grown more uncertain in recent weeks.

“I can’t keep ping ponging back and forth,” Idaho-based Steve Martinez told the Journal after Trump’s latest pause on select tariffs implemented against Canada and Mexico.

Lumber is among the items affected; more than 70 percent of imported softwood lumber comes from the two countries, according to the National Association of Home Builders.

Tariffs aren’t the only challenge facing builders under Trump. Contractors are also facing the potential loss of immigrant labor due to the administration’s hardline stance on illegal immigration and steady stream of deportation threats.

If or when the tariffs do land, the extra costs will likely result in ballooning home prices. The NAHB estimates the costs of building a single-family home could increase by $7,500 to $10,000.

Builders anticipated the tough times ahead under Trump’s second term, with reports of stockpiling materials surfacing shortly after the election. But a drop in consumer demand for new homes could leave builders paying to store materials they can’t use.

Other builders are exploring materials that can be sourced in the United States, constructing smaller homes or taking a stab at modular construction. Builders are also pursuing incentives to reel in buyers, such as mortgage buydowns and cash discounts.

— Holden Walter-Warner