U.S. homebuilders pulled back on projects this spring amid tariff uncertainty, but many are hoping that a recent pause on higher import duties from China and other positive developments will lay the foundation for a brighter outlook.¹ 

Single-family home starts dropped by 12% in April compared to a year ago, according to U.S. Census Bureau data.² Uncertainty over tariffs and the growing cost of building materials coupled with high mortgage rates, home prices, and cautious buyers have caused a slower than normal spring real estate market.³  

About 7% of the construction materials to build a new home, or $14 billion worth of goods, were imported in 2024, including lumber from Canada, drywall, and cement ingredients from Mexico, and home appliances from China — just to name a few.⁴  Home renovations and additions, along with finished goods, can also use large amounts of imported materials, depending on the project.⁵

Tariff-related costs can pop up in unexpected places. The majority of asphalt roofing shingles on U.S. homes are made domestically, but most fasteners are made in China, leading to a 70% cost spike amid worries about tariffs and supply chain disruptions.⁶ It’s a similar story with beds under those roofs; more than 90% of mattresses are U.S. made, but more than 60% of blankets and 80% of pillows are imported from China, along with 99% of alarm clocks.⁷

One of the biggest impact of tariffs has been perceptions and comfort levels among consumers, contractors, builders, suppliers, retailers, and others trying to predict prices and supplies amid the rapid pace of announcements and changes.⁸

But some in the housing industry see cause for optimism after initial trade arrangements with China and the U.K. earlier in May. ⁹

Read more: Homebuyers gain edge in challenging spring market

Goods flow after tariff pause 

The U.S. raised tariffs on China multiple times this year, as high as 145% in early April. A pause and negotiating framework announced May 12 lowered the duty to 30% for at least 90 days.¹⁰

The ultimate outcome of the talks could provide more price and supply certainty on a wide array of Chinese imports, which totaled $438 billion in 2024. Everyday appliances including refrigerators, dishwashers, washing machines, and dryers account for nearly 20% of the imports, while furniture, bedding, lamps, and lighting make up nearly 5%.¹¹

At the very least, the lower rate may have goods flowing again between the two countries. U.S. freight bookings out of China increased nearly 300% the week after the announcement, rebounding from a sizeable drop in April.¹²

Goods imported from China can often arrive to U.S. destinations in about a month. But a sudden surge in demand can also strain limited port space or trucking capacity, which can have negative impacts on shipping times, supplies, and prices.¹³

Home Depot’s move 

In 2024, Americans spent an average of $6,453 on home improvements according to Empower Personal Dashboard^TM data.

Retailer Home Depot said it will keep most retail prices steady as the tariff picture continues to unfold. The company said it has been pushing suppliers to make price concessions and shift production out of China. It also has hopes to have no single country account for more than 10% of its customer purchases by next year.¹⁴

Canada, Mexico, and China are the top three U.S. trading partners for building materials. Mexico is a leading source of a material used in drywall, with 74% of the imported gypsum and lime in 2024 originating there.¹⁵

The U.S. also imports about $3 billion in light fixtures, air conditioning units, thermostats, and ceramic bathtubs from Mexico, along with $500 million in gas ranges.¹⁶ Duties of 25% potentially apply to goods that don’t comply with the terms of the 2020 U.S.-Mexico-Canada Agreement.¹⁷

About 30% of softwood lumber critical for house framing is imported by the U.S., mostly from Canada.¹⁸ Canadian lumber imports are currently subject to a 14.5% tariff, but could go as high as 34.5% after a U.S. review scheduled for late 2025.¹⁹

Read more: Renovation rebound: Home remodeling is on the rise

Building materials and trade talks 

Many U.S. trading partners — apart from China, Canada, and Mexico — are currently subject to 10% tariffs as trade talks continue.²⁰ The 10% rate was featured in a framework deal between the U.S. and U.K. announced May 8, which the U.S. hopes will be the first of many agreements.²¹

The ultimate outcome of many negotiations will affect key building materials such as plywood, which is used in subflooring, roofing, cabinets, and more. More than 40% of plywood is imported into the U.S. and comes from countries including Vietnam, Malaysia, Indonesia, China, and Spain.²²

A proposed 46% tariff on Vietnam was paused and lowered to 10% until at least July 9 as trade talks continue.²³ In addition to building materials, Vietnam is a top exporter of furniture into the U.S., accounting for $9.4 billion in goods in 2024.²⁴ 

Many builders remain concerned about the 25% global duty on steel and aluminum imports, which has caused a spike in many construction materials from nuts, screws, and bolts to steel cable and concrete reinforcing bars.²⁵ Pending trade deals like the one with the U.K. could lower that rate on such imports from specific countries.²⁶

Construction input prices declined in April, mostly due to falling energy prices. But some components saw increases, such as steel mill products (5.9%) and plumbing fixtures and fittings (2.3%), according to an analysis of Producer Price Index data by the Associated Builders and Contractors.²⁷

Even tiny home and accessory dwelling unit (ADU) makers are watching tariff talks. The units have surged in popularity in recent years, but many components including steel, aluminum, lighting, and appliances are imported from China.²⁸

Read more: Small backyard homes break new ground