How will Trump’s tariffs affect home prices, construction costs in Washington state?
President Trump’s new tariffs on goods from Canada and other countries will make it more expensive to build homes in Washington state, some builders said Feb. 3.
Trump announced new 25 percent tariffs on goods from Canada (10 percent for energy) and Mexico, and new 10 percent tariffs on goods from China over the weekend.
Trump initially said he’d start the tariffs Feb. 4, but the afternoon of Feb. 3 said he is pausing those for Canada and Mexico for 30 days.
“I think the confusion and the disruption is certainly not helpful,” Maureen Fife, the chief executive officer of Tacoma/Pierce County Habitat for Humanity, told The News Tribune on Feb. 3. “We’ve been trying to estimate where we would get hit with all of this.”
Almost all of the plywood the nonprofit uses comes from Canada, she said. The Asian-made heat pumps it uses also could be affected, she said.
“There is so much of what goes into a house that comes from other parts of the world,” she said. “We’re just not really sure.”
Conservatively, she said, the nonprofit estimates that the overall cost of materials could go up 25 or 30 percent.
“It’s too early to tell,” she said. “It’s just too early to tell.”
If costs do escalate significantly, it could mean Habitat builds fewer homes, she said, and the uncertainty doesn’t make budgeting easy.
“It’s draining,” Fife said. “It’s a fire drill. And we continue to be responsible and pay attention to the news cycle, but it changes so rapidly, there’s really nothing there you can hang your hat on yet.”
‘A shortage of new construction’
Corey Watson, president of JK Monarch Fine Homes, told The News Tribune on Feb. 3 that tariffs during the pandemic increased the cost of lumber to $75,000 for a 3,000-square-foot home. That’s down to about $23,000 now, he said, and he’s concerned the new tariffs could raise lumber costs again.
“You could see a shortage of new construction,” he said.
The Sumner-based company builds homes in Pierce, King, Kitsap and Thurston counties, he said, in addition to the Tri-Cities.
The company often pre-sells homes to let buyers customize them, but he said that could get riskier as the costs of materials increase. Builders might start opting to wait until a home is finished, see what the total costs are, then take it to market, he said.
During pandemic-era tariffs, he said, the company added clauses to its contracts that allowed it to raise costs and allowed the buyer to pull out, at least prior to the start of construction, to account for uncertainty in the cost of materials.
“It’s challenging,” he said. “We’re already dealing with some cost impacts that are pretty significant for Washington state’s energy code.”
Changes that took effect last year to make homes more energy efficient raised the cost of building a home by $10,000 to $15,000, he said, and electrical code changes added about $1,800 per home, he said.
“It’s a compounding problem,” he said. “All of these things kind of pile on.”
Asked what the tariffs mean for the local housing market, Sean Martin, the chief executive officer of the Tacoma-Pierce County Association of REALTORS, told The News Tribune in an email Feb. 3 that existing homes and new builds would be affected differently.
“I’ve not heard speculation about existing homes being impacted in any major way,” Martin wrote. “Perhaps some home maintenance products are impacted in terms of increased cost. There is something to be said that new home prices pull existing stock prices upwards, but I’ve not seen any data on that with regards to tariffs driving costs. With regards to new construction, there could be some impacts on lumber and other building materials.”
‘Consumers end up paying’
The National Association of Home Builders said in a news release Feb. 3 that there’s already a 14.5 percent duty on Canadian softwood lumber products. The new 25 percent tariff means the total tariffs on that lumber would be almost 40 percent.
The tariffs make construction more expensive, make housing less affordable and will slow down residential construction, the release said.
“On President Trump’s first day in office, he issued an executive order directing departments and agencies to deliver emergency price relief by pursuing actions to lower the cost of housing and increase housing supply,” NAHB Chairman Carl Harris said in the statement. “This move to raise tariffs by 25% on Canadian and Mexican goods will have the opposite effect. More than 70% of the imports of two essential materials that home builders rely on — softwood lumber and gypsum (used for drywall) — come from Canada and Mexico, respectively.”
The NAHB asked the administration for an exemption for building materials before Trump announced the tariffs and is still seeking that exemption, the release said.
“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices,” Harris’ statement said. “NAHB urges the administration to reconsider this action on tariffs, and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production.”
This story was originally published February 4, 2025 at 5:00 AM.
