Homebuilders push Trump for tariff exemptions to stem affordability crisis

The National Association of Homebuilders (NAHB) just wrote a letter to President Trump asking for building materials exemptions on Mexico and Canada tariffs. They correctly noted homebuilder tariffs on lumber and other building materials increase the cost of construction, discourage new development, and increase home prices for homebuyers.

In the Trump letter, NAHB board chairman Carl Harris notes that “since January 2021, inputs to residential construction [aka building materials] saw price increases of just over 30%.”

In this same January 2021 to December 2024 period, prices of newly built homes rose 20.35%, from $354,800 to $427,000.

This 20% rise in the price of newly built homes is shown in the chart above.

If people buy a newly built home at today’s price of $427,500 with 5% down and today’s rate of 7%, their household needs to make $131,000 per year to qualify.*

That’s doable for many households — especially two-income households — but not enough. And homebuilder tariffs on building materials would only make it worse.

The NAHB reminded the Trump administration that the homebuilding sector relies heavily on building materials such as lumber, steel, gypsum (used in drywall), and aluminum, many of which are sourced outside America.

They said Canada and Mexico represent nearly 25% of homebuilding materials imports.

The full NAHB letter, plus the NAHB’s 10 point plan to address housing affordability, are linked below.

Please reach out with any questions on homebuilder tariffs.

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Reference:

– NAHB Urges Building Material Exemption from Planned Tariffs Against Canada and Mexico

– Read NAHB Trump letter asking for homebuilding materials exemptions

– NAHB 10 Point Plan To Address Housing Affordability Crisis

* The Basis Point qualifying calculations cap DTI at 43% using PITI, PMI, and up to $1000/mo in non-housing debt. Please reach out if you want details.