Trump’s New Tariffs Could Raise Home Prices
If you’re thinking about buying a home or planning a big renovation, you might want to brace yourself. President Donald Trump has imposed a 25% tariff on imports from Canada and Mexico, a move that could send construction costs climbing and make housing even less affordable. While the administration says the tariffs are aimed at border security and stopping drug trafficking, homebuilders warn that these new costs will ultimately be passed on to buyers.
Lumber and drywall are among the biggest concerns. Nearly 70% of dimensional lumber used in U.S. home construction comes from Canada, while Mexico is a major supplier of drywall. With higher prices on these essential materials, builders may be forced to raise prices or cut costs elsewhere, such as by making homes smaller or using cheaper finishes.
Danielle Hale, Chief Economist at Realtor.com, predicts that the effects will ripple beyond new construction. If newly built homes become too expensive, buyers may shift their attention to existing homes, driving up prices across the board. Home renovations could also take a hit, as more expensive materials make major remodeling projects less feasible for many homeowners.
In response, the Trump administration has taken steps to increase domestic lumber production, including opening up more national forests for logging. Environmental groups are strongly opposed, but Trump argues that relying on foreign suppliers puts the U.S. at a disadvantage. Still, it’s unclear if domestic logging can ramp up quickly enough to offset rising prices from tariffs.
The international reaction has been swift. Canadian Prime Minister Justin Trudeau called the tariffs “a very dumb thing to do,” and Ontario Premier Doug Ford even threatened to cut off electricity exports to U.S. states like New York and Michigan. Meanwhile, Mexico and Canada are considering retaliatory tariffs of their own, raising concerns of a broader trade war.
With inflation already squeezing home buyers, any added cost to new builds or renovations could make home ownership even more out of reach for many Americans. While the White House insists these tariffs are temporary, the uncertainty they create is enough to make both builders and buyers nervous.
For now, if you’re in the market for a home or planning a big project, it might be wise to keep an eye on these developments—or act fast before prices climb even higher.
Source Inspiration: Realtor.com