October’s “kitchen cabinet” tax will affect homebuyers and renters alike.
Housing in America is about to get more expensive, thanks to new tariffs imposed by President Donald Trump that will take effect this Wednesday, October 1.
The new tariffs include a 50 percent tax on imported kitchen cabinets and bathroom vanities, 30 percent on upholstered furniture, and 25 percent on heavy trucks used in construction. These will join existing tariffs on steel, aluminum, and lumber, which have been driving up construction costs this year. Back in April, the National Association of Home Builders (NAHB) estimated that tariffs were adding about $10,900 to the cost of building a typical new home — and that was before the steep August tariffs took effect. No doubt the October ones will only escalate the problem.
Some companies stockpiled materials before the tariffs kicked in, creating a temporary buffer. But those inventories won’t last forever, and the building industry faces a fundamental challenge: Each additional $1,000 in home construction costs prices out more than 115,000 potential home-buying families, according to NAHB.
This all comes at the worst possible time. Housing experts estimate the country needs at least 3.7 million homes to bring down costs and ease the severe housing shortage. More than 770,000 people were officially counted as homeless last year, mortgage rates hover around 6.4 percent, and nearly 75 percent of American households can’t afford a median-priced new home. The affordability crisis touches everyone—from renters competing for scarce apartments to homeowners delaying renovations to builders struggling with supply chain chaos. Now, tariffs are pouring fuel on these already raging fires.How tariffs hit buyers directly
When Trump slaps a 50 percent tariff on kitchen cabinets from abroad, American importers — not the foreign companies manufacturing the cabinets — pay that tax. They then pass those costs along to builders, who pass them to homebuyers. If a developer was planning to install $15,000 worth of imported cabinets in a new home, they’re now looking at an extra $7,500 in costs. Multiply that across appliances, fixtures, lumber, and steel, and the numbers add up fast.
In total, about 7 percent of all goods used in new residential construction come from foreign countries, according to NAHB. That might sound small, but it represents $14 billion worth of materials in 2024 alone.
The impact varies dramatically by location. A June study by the real estate firm Evernest found that tariffs could add anywhere from $26,180 to the cost of a new home in Oklahoma to over $100,000 in Hawaii. In expensive markets like California and Massachusetts, the additional costs from tariffs are estimated to exceed $60,000 per home.
The Trump administration, for its part, maintains it holds no blame for whatever affordability crisis renters and homeowners might experience as a result of their trade decisions.
“America’s housing affordability was dramatically worsened by Joe Biden’s open border policies that let tens of millions of illegal migrants walk into the country and overburden housing markets that were already grappling with cumbersome regulatory hurdles,” White House spokesperson Kush Desai told Vox.
