Tariff pause with Canada, Mexico welcomed by builders 

Home builders have avoided a price hike in materials — especially lumber — after the Trump administration said it would delay steep tariffs on Canadian and Mexican goods for at least 30 days. 

The proposed 25% tariffs were scheduled to go into effect on Tuesday, Feb. 4, but were paused after the leaders of Canada and Mexico made deals with President Trump, agreeing to send thousands of troops to U.S. borders in an effort to curb drug smuggling and illegal immigration.

While the situation remains fluid, as of the time of publication, the 10% tariff imposed today on Chinese goods remains active. China immediately struck back with retaliatory tariffs, according to The New York Times.

Sigh of relief for home builders: The temporary reprieve is good news for the construction industry, said Danielle Hale, chief economist at Realtor.com.

"In particular, Canadian lumber is an important input in home construction, finishes such as cabinets, and furniture," Hale said, adding that this is happening at a time when the U.S. is already dealing with an ongoing housing shortage.

Prior to the pause, Carl Harris, chairman of the National Association of Home Builders, sent a letter to President Donald Trump outlining the organization's "serious concerns" about the effects of the proposed North American tariffs. 

"An ongoing challenge facing home builders is the cost and availability of building materials," Harris said in the Jan. 31 letter, adding that "further supply chain disruptions from increased tariffs coupled with increased demand for materials could also hinder rebuilding efforts in areas affected by natural disasters, which you have pledged to help rebuild as quickly as possible."

NAHB is particularly concerned about two essential building materials: softwood lumber and gypsum, which is used for drywall. More than 70% of those materials come from Canada and Mexico.