Canadian imports at the heart of housing cost surge
New data from the Canadian Chamber of Commerce reveals a potential blow to U.S. housing affordability: the cost of building a new home could rise by up to $20,000 by 2027 due to escalating tariffs on Canadian imports. The report warns that materials like lumber, steel, and copper — essential to home construction — are becoming more expensive as a result of President Trump’s trade policy.
In 2023, Canada supplied 69% of all U.S. lumber imports, 25% of imported iron and steel, and 18% of copper. With housing already stretched thin and mortgage rates remaining high, experts fear the added burden of tariffs could push homeownership further out of reach for many Americans.
Tariffs and housing: mounting pressure
Trump’s trade strategy, which includes a 35% tariff on non-USMCA-compliant Canadian goods starting August 1 and existing 50% tariffs on imported steel and aluminum, has sent ripples across the construction sector. According to the National Association of Home Builders (NAHB), the materials hit hardest by tariffs make up a significant portion of the $184 billion spent on new single-family and multifamily homes in 2023. Of that total, $13 billion — around 7% — involved imported goods.
Lumber alone accounted for $8.5 billion, and more than two-thirds of that came from Canada. The NAHB also reported that 60% of builders surveyed in April were already experiencing price increases tied to tariffs. Builders in states like Texas, Florida, and California — where demand and import reliance are high — are expected to feel the brunt of these additional costs.
White House defends policy, builders face pricing chaos
The White House rejected claims that tariffs will raise costs for American consumers, arguing that the burden falls on foreign exporters. Officials cited a recent analysis from the Council of Economic Advisors claiming that prices of imported goods have fallen this year, despite tariff increases.
However, on the ground, many U.S. homebuilders are struggling to price new projects accurately. NAHB’s chief economist Rob Dietz emphasized that while 60% of builders report price hikes, 40% have not experienced cost changes — a disparity that underscores the uneven effects of tariffs depending on sourcing strategies and regional supply chains.
Broader consequences and trade tension with Canada
U.S.-Canada trade relations are increasingly strained. Trump’s repeated adjustments to tariff rates and expansion of trade penalties have prompted backlash in Canada, with some citizens boycotting U.S. goods and selling American properties in protest.
The uncertainty surrounding construction material costs has left many homebuilders in limbo, unable to reliably forecast project expenses or timelines. With housing shortages persisting across the country and affordability already a pressing concern, any policy that introduces further price volatility risks deepening the crisis for would-be homeowners.