U.S. Hikes Canadian Lumber Duties to 34.45%. Here’s What it Means for Housing.

After a brief rally last week, fueled by falling mortgage rates and an expected tariff exemption for Canadian lumber, home builders are taking another hit. 

According to a CNN news article, the U.S. government is more than doubling duties on Canadian softwood lumber, driving up costs and sending homebuilder stocks into a fresh slide.

So, what does this mean for the housing market? And how should real estate agents prepare? 

Let’s break it down.

Duties on Canadian Lumber to Increase from 14.4% to 34.45%

The U.S. Department of Commerce plans to increase duties on Canadian softwood lumber from 14.4% to 34.45%, citing long-standing disputes over subsidies. This move comes before additional tariffs on Canadian imports even take effect.

Why does this matter?

• 30% of softwood lumber used in U.S. home construction is imported.
• Canada accounts for 80% of those imports. 
• Builders estimate that the cost of an average home could rise by $9,200 due to these tariffs.

In short, expect higher building costs, potentially slower construction, and even more pressure on home affordability.

In a statement released on Saturday, April 5th, British Columbia Premier David Eby described the duties increase as an “attack on forest workers and British Columbians.” He also slammed it as an “unjustified” move that will end up “driving up housing costs for Americans who voted for a president who promised to lower costs.” 

Meanwhile, Andrew Miller, the U.S. Lumber Coalition Chairman, defended the increase as a way to level the playing field, pointing a finger at Canada for what he referred to as “abusive dumping and subsidies practices”: 

“These unfair trade practices are designed by Canada to maintain an artificially inflated US market share for Canadian products and force US companies to curtail production, thereby killing US jobs.”

Homebuilder Stocks Drop as Costs Rise

The stock market’s reaction was swift. Shares of D.R. Horton (DHI), PulteGroup (PHM), and NVR (NVR) all fell roughly 5% on Monday, reversing last Friday’s gains. 

This follows a brief homebuilder stock rally last week, when mortgage rates dipped and the 10-year Treasury yield fell to 4% (as low as 3.86% at one point, its lowest since October).

However, while lower mortgage rates can boost demand, the increased duties could wipe out those gains by making new homes even more expensive to build. 

The National Association of Home Builders (NAHB), according to its March 2025 Housing Market Index (HMI) report, warns that tariffs on other key materials could boost the average cost of building a home by $9,200, keeping home prices elevated nationwide. 

“Construction firms are facing added cost pressures from tariffs. Data from the HMI March survey reveals that builders estimate a typical cost effect from recent tariff actions at $9,200 per home. Uncertainty on policy is also having a negative impact on home buyers and development decisions.”

Robert Dietz

Chief Economist

How Real Estate Agents Can Prepare

Cost pressures in the housing market aren’t going away anytime soon. And to be fair, this is anything but new. 

So, what can you do to dispel the nationwide panic over tariffs and help your clients understand what’s really going on and how it affects them? 

Be the go-to resource and advisor on all things real estate for your local community and online audience. That means— 

1. Stay on top of developments (tariff-related or otherwise) that impact home buyers and sellers, and… 
2. Keep your clients and community in the loop with clear, accurate and accessible information. 

Don’t leave them at the mercy of partisan media sources and doomsday prophets on social media. 

Real estate agents who stay informed, communicate effectively, and adapt their strategies will be best positioned to guide their clients through the uncertainty.