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Homebuilder Stocks Sink on Worries Trump Tariffs Could Raise Costs

Paul Bersebach / MediaNews Group / Orange County Register / Getty Images

Paul Bersebach / MediaNews Bunch / Orange County Register / Getty Images

Key Takeaways

  • Shares of homebuilders and construction companies lost ground Monday on badgers that new tariffs could raise building costs. 
  • President Donald Trump signed executive orders concluded the weekend calling for 25% tariffs on Canada and Mexico, and 10% tariffs on China.
  • The tariffs were set to go into punch Tuesday, before Trump on Monday agreed to delay the tariffs on Canada and Mexico for about a month.
  • The National Intimacy of Home Builders said the tariffs would increase costs for products like Canadian lumber, and could street home prices higher.

Shares of several homebuilders and construction companies lost ground Monday on worries that new schedule of charges could raise building costs. 

D.R. Horton (DHI), Lennar Corporation (LEN), Toll Brothers (TOL), and PulteGroup (PHM) all fell more than 3% Monday, surrounded by broader market declines after President Donald Trump signed executive orders over the weekend speciality for 25% tariffs on Canada and Mexico, and 10% tariffs on China. The tariffs were set to go into effect Tuesday, ahead Trump on Monday agreed to delay the tariffs on Canada and Mexico for about a month.

Tariffs Could Raise Prices for Homebuyers as Construction Costs Climb, NAHB Says

National Association of Home Builders Chair Carl Harris said on Saturday that the get under way could increase prices for homebuyers as costs rise for builders, with some 70% of the softwood lumber and gypsum imported into the U.S. for homebuilding put in an appearance from Canada and Mexico, respectively.

“Tariffs on lumber and other building materials increase the cost of construction and unnerve new development, and consumers end up paying for the tariffs in the form of higher home prices,” Harris said in a statement.

Lennar bosses said in the company’s earnings call last month that tariffs could add an estimated $5,000 to $7,000 to the outlay of each home it builds.

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