The US housing market is feeling the pinch from President Donald Trump’s changing tariff policies. The increasing costs of raw materials such as lumber, stone, and copper are making new homes more expensive, while renovations face higher prices due to tariffs on appliances, fixtures, and glass. Economic uncertainty has also led to fluctuating mortgage rates, making it harder for lenders to close deals.
The White House is particularly interested in lumber, which imports 30% of US demand, according to the National Association of Home Builders. Lumber costs could more than double this year due to import taxes on Canadian wood. Other materials like stone tiles and granite are also facing price hikes due to tariffs in Europe. Trump has implemented industry-specific tariffs on copper and already imposed steel and aluminum tariffs.
Home renovators will feel the impact of these tariffs, particularly those importing materials from China, such as glass and cabinetry. The cost of renovations could rise by 10-15% due to tariffs, although not all increased costs are passed on to consumers.
Fluctuating mortgage rates are another challenge for home buyers. Treasury yields have soared this week, influencing mortgage interest rates, which jumped to over 7%. This uncertainty is making it difficult for lenders to finalize deals, with rates changing by half a percent or more in just four days.
As the housing market continues to face price pressures due to limited supply and elevated mortgage rates, tariffs are adding another layer of complexity. Home builders, renovators, and mortgage brokers must navigate these challenges, which could have significant impacts on buyers, sellers, and the overall economy.
Source: https://www.investopedia.com/here-s-where-tariffs-will-hit-the-housing-market-11713457