In recent years, home prices have been rising much faster than rents. In fact, according to real estate marketing platform Redfin, the median asking rent dropped slightly in March by 0.6% to $1,610 per month year-over-year. However, this could change as tariffs come into the picture. For 13 consecutive months, rent fluctuations have been minimal—less than 1% year-over-year—but tariffs on building materials could raise prices for renters, especially since about 25% of the softwood lumber used in U.S. rental construction comes from Canada.
Redfin economists have been saying for months that it’s only a matter of time before rents tick up again. That’s because apartment construction is slowing, which will likely motivate landlords to raise rents because there won’t be as much supply, meaning they won’t be competing as fiercely for tenants. Now there’s a new twist that could expedite this process: tariffs.
“America gets a lot of building materials from other countries, so tariffs will make building apartments more expensive. That could further hamper apartment supply, causing rents to jump,” said Redfin Economics Research Lead Chen Zhao. “Tariffs could also drive up rents by increasing demand. People may opt to rent instead of buy homes because the turmoil around tariffs has fueled widespread economic uncertainty. Tariffs have already caused huge swings in the stock market, and they will lead to higher prices for many goods and services, along with increased unemployment.” Read more
