How New Tariffs Could Drive Up Housing Costs — And What It Means for San Diego

The cost of building and renovating homes in the United States is about to get even more expensive. New tariffs announced by the federal government this month will impose steep duties on timber, lumber, furniture, and cabinetry — all critical elements of residential construction and design. For an already strained housing market, these increases could slow new construction, reduce available inventory, and push values higher across the board.

The Details: What’s Changing
Beginning October 14, the U.S. will levy new tariffs on imported building materials:

• 10% tariff on timber and lumber

• 25% tariff on kitchen cabinets and bathroom vanities (increasing to 50% on Jan. 1)

• 25% tariff on upholstered furniture (increasing to 30% on Jan. 1)

These tariffs follow earlier duties on steel and aluminum, meaning nearly every major material category involved in new construction is now facing added costs.

Why It Matters for Housing
Industry leaders warn these tariffs will create added headwinds for a housing market already grappling with high interest rates and limited supply. The National Association of Home Builders has estimated that about 7% of all goods used in residential construction come from abroad, underscoring just how much pricing pressure these new tariffs could introduce.

For homeowners and buyers, the ripple effects are clear:

• Fewer New Homes: Higher construction costs mean fewer new projects will break ground.

• More Expensive Renovations: Remodeling existing homes will cost significantly more, especially for high-end kitchens, bathrooms, and custom finishes.

• Rising Insurance & Replacement Costs: If it costs more to build, it will also cost more to insure and repair homes.

Implications for San Diego’s Luxury Market
In San Diego’s high-demand coastal and inland luxury markets, the impact could be magnified. Estates in areas like Rancho Santa Fe, Del Mar, and La Jolla often rely on imported materials and specialty finishes, meaning replacement costs are now substantially higher.

For buyers, this reinforces the value of acquiring an existing, move-in-ready property — often at a price point well below what it would cost to replicate today. For sellers, it provides added justification for premium asking prices, as rising construction costs set a higher benchmark for replacement value.

Featured New-Build Opportunities: Exceptional Value vs. Building Today

With construction costs climbing, one of the greatest advantages buyers have right now is the ability to purchase a recently completed or nearly new estate — without taking on the expense, risk, and timeline of starting from scratch.

The Jason Barry Team is proud to represent some of San Diego’s most spectacular new-build properties, each offering the luxury of modern design and craftsmanship at a value that far exceeds what it would cost to replicate today:

• 2082 Via Casa Alta, La Jolla – Perched high above La Jolla Shores, this architectural masterpiece blends cutting-edge contemporary design with panoramic ocean views. A rare opportunity to own one of La Jolla’s newest estates without enduring today’s inflated build costs.

• 17845 Via De Fortuna, Rancho Santa Fe – A newly completed timeless modern traditional European-inspired estate offered fully furnished with curated interiors. At over 10,000 square feet, this residence reflects years of thoughtful planning and design — now available move-in ready and fully furnished, redefining what “just bring a toothbrush” truly means.

• 17965 Via De Fortuna, Rancho Santa Fe – Situated on a prime Covenant site, this new construction estate delivers timeless architecture with every modern amenity. For buyers, it represents an extraordinary chance to secure a brand-new luxury home without navigating the rising costs and multi-year process of building today.

For buyers evaluating new builds, these properties underscore a powerful truth: you can step into more home, more design, and more value than you could ever build for the same investment in today’s market.

The Bottom Line
While interest rate cuts may provide some relief on financing, new tariffs are pushing construction costs higher at every level — from building new homes to renovating existing ones. For San Diego’s luxury housing market, this dynamic supports higher values per square foot and underscores the importance of timing in real estate decisions.

If you peel the layers back further, it becomes apparent that this new environment will present good opportunities. If you’d like to know more, please call Jason, Ryan, or Kendra — we’d be happy to explain.