In a recent announcement, the Trump administration declared sweeping new tariffs on nearly all U.S. trade partners. According to real estate marketing platform Redfin, the U.S. is introducing a new baseline tariff of 10% on imported goods, with even higher rates for certain countries, including China, which will be subject to an additional 34% tariff. Likewise, the European Union, Taiwan, and Japan are subject to 20%, 32%, and 24% tariffs on imported goods, respectively. Canada and Mexico will continue to face 25% tariffs, except for goods covered by the United States-Mexico-Canada Agreement. These tariffs won’t take effect until April 9, which could allow time for negotiations.
Under President Trump’s second term, tariffs have increased from an average of 2.5% to around 8% before this announcement. The impact of these tariffs on the housing market remains uncertain. If inflation stays high, mortgage rates could rise, and the cost of home construction is expected to increase due to higher prices on imported materials such as lumber, drywall, and appliances, despite the exemptions made for Canada and Mexico.
How much more depends on a few factors: where the tariff rates finally land and their longevity, how much exporters choose to decrease prices, any currency market adjustments in response to the new tariff policy, and how much importers pass the increased costs to their customers.
For homebuyers, how much more a new home will cost depends on how much of the increased expenses builders pass on. But it’s very likely prices of new homes will increase meaningfully. Read more
