Trump’s proposed tariffs on Mexico and Canada have been delayed for at least a month but, if implemented, would likely increase the cost of homebuilding in the short term.
According to Zonda principal Todd Tomalak, new tariffs on key construction materials—such as steel, aluminum, and Canadian lumber—would drive up the cost of homebuilding. With material prices already elevated, these tariffs could further strain housing supply, pushing home prices even higher.
For real estate investors, this reinforces the ongoing supply-demand imbalance in the market. Higher building costs may limit new housing starts, tightening inventory and sustaining price appreciation, especially in high-demand markets.
Builders would likely adapt by shifting material sourcing or passing costs onto buyers. Either way, affordability remains a growing challenge. Investors should watch how these trends impact rental demand and long-term appreciation potential.
Source: Salandro, V. (February 03, 2025). How Tariffs May Affect the Home Building Industry. BUILDER Online.
