(C) Minnesota Reformer
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Builders beginning to feel cost of Trump’s taxes on imports • Minnesota Reformer [1]
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Date: 2025-07-17
Homebuilders are beginning to feel the impact of tariffs on their input costs, according to data released Wednesday by a national trade group.
The cost of construction inputs skyrocketed during the pandemic as interest rates plummeted. Builders took advantage of cheap financing to launch new projects, driving up demand for inputs, even as the pandemic caused supply chain holdups, restricting the supply of available materials.
Prices remain well above pre-pandemic levels, and now the impact of import taxes is beginning to show up in builders’ balance sheets.
Minnesota, like the rest of the country, has a shortage of homes across the price spectrum, and the poorest residents have the fewest options. Increased costs to builders are likely to translate into higher home prices and rents as financers seek to recoup the cost of construction.
President Donald Trump’s on-again, off-again taxes on imported goods has made future economic conditions difficult for businesses to predict. While Trump has rolled back or canceled many of his proposed import taxes, others have already taken effect.
The new residential construction price index, which measures the cost of goods and services for residential construction, was up 2.6% from June of last year. Parts for construction machinery — for example, replacement saw blades — are 24% more expensive than this time last year. The price of some metal products have increased by 10% or more over the same time period, with 50% import taxes to come in August.
Many builders stocked up on important inputs in the first half of the year, anticipating higher future prices, and are still working through that inventory, said Jesse Wade, director of tax and trade policy analysis for the National Association of Home Builders, which released the data this week. Consumers may not see the impact on home prices until later this year, Wade said.
Wade says he anticipates builders’ costs to continue rising throughout the summer as additional tariffs take effect, though he expects price increases from tariffs will be more moderate than the post-pandemic, supply-chain related spike in 2021 and 2022.
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