Although United States single-family building permits saw some decent growth in 2024 — with a 6.7% increase to 981,834 units — home builders are concerned about the impact of tariffs on many of the key building materials they install in homes. The National Association of Home Builders (NAHB) estimates that 7.3% of all building materials used in new residential construction last year were supplied from a foreign country. In a recent NAHB/Wells Fargo Housing Market Index survey, home builders said new tariffs could add $9,200 to the cost of a new home.
Fortunately for home builders, softwood lumber from Canada and gypsum board from Mexico are so far exempt from any additional tariffs (at the time of publication). NAHB says Canada accounts for roughly 85% of all U.S. softwood lumber imports and nearly a quarter of the available supply in the United States. In an official statement to the media, NAHB chairman Buddy Hughes said, “While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs. However, NAHB is pleased President Trump recognized the importance of critical construction inputs for housing and chose to continue current exemptions for Canadian and Mexican products, with a specific exemption for lumber from any new tariffs at this time.”Home builders
off to a bit of a slow start in 2025, with February single-family permits dropping to an annual rate of 992,000, 0.2% below the January figure and 3.4% down from February 2024’s mark. Despite the sluggish start in 2025, some local Metropolitan Statistical Areas (MSAs) are coming off a terrific year of growth in 2024. For instance, builders in the Phoenix-Mesa-Chandler, Ariz., area pulled 5,356 more permits than in 2023 for a 21.6% gain. Other MSAs with at least 20% year-over-year gains and increases of at least 1,000 building permits were Las Vegas-Henderson-Paradise, Nev. (+21.7%); San Antonio-New Braunfels, Texas (+24.7%); Indianapolis-Carmel-Anderson, Ind. (+22%); Boise City, Idaho (+27.1%); Ocala, Fla. (+27.6%); and Fresno, Calif. (+44.1%).
As has been the case for as long as Electrical Marketing has been analyzing building permit data, a relative handful of markets account for the lion’s share of the residential building permit activity. In the 100 MSAs that logged the most building permits (see the Table), about a dozen Intermountain and Sunbelt states accounted for most of the total (see Figure above). Florida had 18 MSAs in the Top 100, followed by California (9), North Carolina (8), South Carolina (6), Texas (6), Georgia (4), Utah (4), Tennessee (4), Colorado (3), and Arizona (3). The Top 100 MSAs in the table accounted for 705,048 single-family permits, 72% of the total, while the Top 50 MSAs accounted for 56% of all single-family permits pulled in 2024. The top 10 accounted for 25%.
With all the attention in the construction market on data centers and large semiconductor and EV plants, home building remains a critically important segment of the market. New housing attracts various other commercial construction activities, including retail strip malls, big box stores, hospitals and medical buildings, schools, and houses of worship. Although the residential market faces a challenging year due to tariffs, the uncertain economy, and zoning restrictions for new development, it will still be a key market for many contractors and other professionals in the electrical field.
