Homebuilders are bracing for the next wave of pricing pressures in the housing market as new federal tariffs ripple through supply chains.

In April, the federal government announced a 10 percent tariff on all imports, with levies as high as 50 percent against select countries and a steep 145 percent duty on certain Chinese goods. Within a week, most of the tariffs were paused for 90 days in response to bond-market turbulence, though the China tariffs remained in place. According to the Florida Tariff Impact Report, construction costs in the state are expected to increase by more than $3 billion, with the price of a typical new home build rising by roughly $10,000.

A tariff is essentially a tax on an imported good. When a retailer brings in a $500 washing machine from a country subject to a 25 percent tariff, it owes $125 to the U.S. government. The retailer can attempt to push costs back to the exporter, absorb the costs itself or—the most frequent scenario—pass them on to the consumer. In construction, where imports are woven into the supply chain, the result is usually higher costs for builders and buyers alike.

For builders, the impact is visible but uneven. “Everybody reports about $11,000 more per home,” says Jon Mast, CEO of the Manatee-Sarasota Building Industry Association, who notes that about 40 percent of builders report no impact thus far. “It’s a little over a 2.5 percent increase. It’s not egregious, but it’s still money.”

He says that interest rates remain the larger drag, pointing to permits for single-family homes in Sarasota and Manatee counties, which, he notes, fell from about 5,000 last year to just under 2,250 through June of this year. 

At the ground level, smaller suppliers describe pressure building across the chain. “The overall cost of these homes today continues to surprise me,” says Rodney Evans, a sales representative for Kimel, which sells roof trusses. “Could it reach $10,000 more? Easily. Appliances are more expensive, and they’re often imported. A lot of times we’re notified about a price increase without knowing if it’s tariff-related.”

Evans estimates costs are up about 7 percent on a handful of items. “Initially, people were very anxious," he says. "Back in March, when they were talking about 25 percent tariffs—that was quite terrifying." To manage inventory, he has leaned on domestic partnerships while avoiding over-ordering that could create false demand. “We have amazing partnerships with builders. Everyone carries a little—including the end user, though not fully. None of us want to slow down sales.”

Uncertainty is a theme across the board. “What I think tariffs have done, more than anything, is create uncertainty and fear—and fear drives prices,” says Jay Schoenfelder, vice-president of Trinity Custom Homes. “Vendors automatically raise costs to make sure any impact to them is covered. I’ve seen some international suppliers say you need to put down a deposit right away to lock in pricing. They’ll say, ‘We won’t escalate, but let’s get locked in.’”

Schoenfelder notes that while larger companies may absorb increases in the short term, “builders will eat the costs on contracts already in place, but as time goes on, those costs may trickle down to the buyer.”

For larger developers, scale offers a measure of protection. Zander Devlin, vice president of purchasing at Neal Communities, describes copper prices spiking nearly 40 percent before settling closer to 15 percent, driving up costs for appliances, electrical components, and fixtures. The National Association of Home Builders (NAHB) estimates that about 7 percent of all construction materials are imported, with Canadian lumber accounting for roughly 85 percent of U.S. softwood lumber imports and nearly a quarter of the domestic supply. The U.S. Commerce Department currently imposes combined countervailing and anti-dumping duties that now exceed 35 percent on Canadian lumber—a sharp increase from earlier rates of around 14.5 percent. And material costs overall have risen 34 percent since late 2020, far outpacing inflation.

In April, NAHB and Wells Fargo surveyed builders nationwide and found a typical tariff-related cost increase of about $10,900 per home. That lines up with Mast's $11,000-per-home increase estimate; Devlin says it's in line with what Neal is seeing, too. 

“Really, it’s still up in the air. There’s no definitive answer because every week there’s something new globally," Devlin says. "At one point, copper went through the roof, and now it’s down. [But] it’s still a sizable increase." By tracking metrics and planning ahead, Devlin says Neal stocked rebar, garage doors and light fixtures before price hikes hit. “Broadly speaking, [the estimated $10,000 increase in the cost of building a home] is accurate, [but] I don’t think we’re quite that high—more like $8,000 or $9,000. Things are slower right now, which actually helps us combat it. Everyone is working together, but ultimately the homebuyer is most affected,” Devlin says.

The effects ripple into the real estate market, too. “Rising material costs and recent federal trade policies, including tariffs, are increasingly coming up in conversations between realtors and both their clients and colleagues,” says Debi Reynolds, president of the Realtor Association of Sarasota and Manatee (RASM) and a local realtor-broker. She points to a shift in buyer behavior.

“Agents report that buyers are more price-sensitive, and many are holding off on committing to pre-construction until they know prices won’t change midway," she explains. "They are shifting interest to resale homes or fixer-uppers because of lower sticker shock. While some still prefer new construction for modern features, the practicality and affordability of resale homes are driving increased demand.”

Recent developments suggest the pressure could intensify. Axios affirmed this month that tariffs are helping drive national construction costs higher, part of a broader squeeze on the housing market. A July Reuters survey found tariffs could increase U.S. homebuilding costs by 4 percent to 10 percent, depending on region and materials—a projection that mirrors what Southwest Florida builders are already reporting. The national effective tariff rate remains elevated at historic levels, and while Canada announced it will remove some retaliatory tariffs on U.S. goods, lumber and metals are still excluded.

For a region where construction is among the largest industries, the burden may continue to fall on builders, suppliers, and, eventually, buyers. As Mast says, “Every $1,000 increase in the price of a home cuts out 100 prospective families,” he says.