Last week, the nonpartisan Brookings Institution wrote that, while the government wants to make housing more affordable, tariffs on lumber, gypsum, steel, and now, kitchen cabinets, bathroom vanities, will push up costs.
Brookings says, "Using TPC’s [Tax Policy Center's] tariff model, we calculated that current tariffs, including those just announced, will add roughly $30 billion to the costs of investment in residential structures. Our calculations show that about 90% of the costs to residential investment will fall on construction of new homes, including apartments."
Brookings also warned that the same tariffs will hit renovation and maintenance projects, along with the purchases of appliances and furniture.
$10,900-Per-Home Cost Increase?
The National Association of Home Builders (NAHB) reckons, "The cost of building materials has already risen by 34% since December 2020, which is far higher than the rate of inflation. Data from the NAHB/Wells Fargo Housing Market Index (HMI) April 2025 survey reveals that builders estimate a typical cost effect from recent tariff actions at $10,900 per home."
That April survey won't have picked up the impact of more recently introduced tariffs.
"A tariff is essentially a tax on an imported good, meaning the importer pays an additional cost for importing such an item from another country," explains the NAHB.
Of course, the NAHB focuses on home construction projects; they are what its members do. However, higher tariffs may also affect costs for homeowners carrying out renovations and remodels, or even routine maintenance. They will also affect landlords who buy — and others who flip — fixer-uppers.
Starting October 14, there will be a 10% tariff on imported softwood timber and lumber, and 25% on upholstered wooden products, kitchen cabinets and vanities. Those 25% rates are scheduled to step up in the coming months, reaching 50% by January 1, 2026.
Canadian softwood lumber, which accounts for roughly 85% of America's imports of these products, carries a 14.5% tariff, but the Commerce Department says it intends to more than double that to 34.5% by the end of this year.
Do Tariffs Really Increase Prices?
Why the Delays in Higher Prices?
For example, the Budget Lab at Yale reckons the impact on prices of tariffs will eventually hit. It provides several reasons for their effect being delayed:
- Pre-buying: Importers and consumers buy ahead of tariffs being implemented to avoid them. On October 7, The Wall Street Journal reported on retailers' current high inventories across many goods, often caused by stockpiling early to avoid paying high tariffs.
- Delayed payments: Tariffs often don't apply to goods already in transit to the U.S. so there's a delayed reaction to new tariffs.
- Avoidance: Importers are avoiding or evading tariffs, something the Budget Lab reckoned could account for 10% of tariffed imports. In particular, importers may be misdescribing some imports from Canada on their customs declarations to minimize their tariff liabilities.
Will Tariffs Eventually Lead to Higher Prices?
Meanwhile, there is evidence that American importers, wholesalers and retailers are currently absorbing some of tariffs' costs. "'Business owners price their goods at replacement cost. If they have to buy the same good in the future, they have to increase the price [charged to the customer] if the price of the replacement is higher,'" Eugenio Aleman, chief economist at Raymond James told Fortune.
Some American companies may be willing to shield their customers from some of the effects. But that would reduce their bottom lines, something stockholders will soon object to.
Let's hope the government is right and all these experts are wrong. Otherwise, tariffs could put additional pressure on homeownership costs.
