4 Ways President Trump’s Tariffs Could Impact Home Prices
Written by
T. Woods
Edited by
Rebekah Evans
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Tariffs, tariffs, tariffs — more and more throughout the previous presidential campaign and especially since President Donald Trump has retaken the White House, tariffs seem the be the primary economic news subject of the day. Especially since President Trump has threatened tariffs (for instance, taxes on goods imported to the U.S. from foreign countries) on all of America’s primary trading partners.
A significant consequence of tariffs on foreign trading partners is an increase in prices here at home — the importers raise their prices to offset the tariffs, the American retailers and companies receiving those imports in turn raise their prices to offset the importer’s price hike.
While many have weighed how tariffs will impact American retailers, significant consideration should be given to the ways in which tariffs will impact an American marketplace that has already been in a shaky state: the housing market.
Here is how Trump’s tariffs could impact housing prices.
An Increase in Overall Home Prices and Mortgage Rates
Per reportage from USA Today, housing prices will almost certainly spike as a result of tariffs. Housing industry analysts at John Burns Research and Consulting predict that tariffs will increase housing prices by 5%. While 5% might seem small, that actually means the addition of nearly $21,000 to any new home’s price. Increased home prices also mean increased mortgage rates.
Construction Supply Prices Will Increase
Why will housing prices increase? Because their cost of production will increase as well. According to USA Today, nearly 60% of all home construction and hardware imports in America come from Canada, China and Mexico — the three countries Trump has threatened the most with tariffs. With import prices increasing, domestic suppliers of construction goods will likely hike their prices as well.
Production Will Fall Off
Because home construction materials (both imported and domestic) will increase in price, housing construction will become more expensive and thus production numbers will fall off as a response to a supply shortage.
Home Construction Labor Numbers Will Decrease
Once housing production numbers drop, the construction industry will most likely have to institute labor layoffs to counter their business losses. This labor shortage will then only add to the decrease in housing production.
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