NASHVILLE, Tenn. — Homebuyers in Middle Tennessee may soon feel the effects of President Donald Trump’s tariffs, though it remains uncertain how significant the price increases will be, according to a leading homebuilder in the region.

The National Association of Home Builders (NAHB) reports that approximately 7% of materials used in constructing new homes come from overseas. With tariffs in place, these imported materials could cause a rise in construction costs, potentially increasing the price of building a new single-family home by $7,500 to $10,000, according to NAHB estimates.

In particular, softwood lumber, which is primarily imported from Canada, could be affected by the tariffs. The U.S. imported $5.9 billion worth of sawmill and wood products from Canada in 2024 alone. Additionally, the U.S. relies on imports for 74% of its gypsum products, crucial for drywall production, with much of it coming from Mexico.

Ole South Properties, one of the largest homebuilders in Tennessee, emphasized that while tariffs could raise material costs, they would not immediately pass those increased costs onto homebuyers. Instead, the company plans to adjust by building smaller homes.

"In our market in Middle Tennessee, the consumer is at their limit," said Trey Lewis, Vice President of Ole South Properties. "Until they have relief in the ability to afford more, they can’t pay any more. We’re in the business of building homes. The alternative [to raising prices] is you’re going to slow down. That will cost us more than not raising prices at this time."

The NAHB report also highlights that the U.S. imports 30% of its softwood lumber because domestic production can’t meet demand. Despite the challenges, Lewis remains hopeful that the tariff-induced price hikes will be temporary.

"I’m hoping that Maine, Washington, Oregon — the lumber-producing states in our country — maybe they can pick up the slack," Lewis added.

As tariffs on materials like lumber and aluminum continue to have far-reaching effects on the construction industry, homebuilders like Ole South Properties are making strategic decisions to adapt, including rethinking the sizes of homes they build. While these changes might delay projects, many in the industry are hopeful that the situation will stabilize soon, and domestic production of materials will help alleviate some of the cost burdens. However, until that happens, homebuyers could see higher prices in the housing market, particularly for new homes that rely heavily on imported materials.

Originally reported by Kori Johnson in WKRN.