New report reveals how Trump’s tariffs could make it expensive for Americans to build homes
Rising costs of housing have been a major reason behind the affordability crisis that Americans are having to deal with. It seems like things are only going to get worse for the time being, as one of the first things that US President Donald Trump did after swearing into office for the second time was slap massive tariffs on almost every single country in the world. This has raised the cost of several items, including construction materials critical for building homes.
A recent report by the Center of American Progress (CAP) states that these higher building costs will lead to a whopping 450,000 fewer homes built in the country over the next five years. While that seems bad, it is important to remember that Trump cannot be blamed entirely for the situation the housing market finds itself in. The prices of homes have seen an upward trend since 2013, and the rate has been faster than the overall inflation rate.
The Trump administration has let down the public by not keeping those rising prices in check. The Republicans had promised affordability across all sectors, including housing. However, instead of making good on that promise, it seems like the administration is going in the opposite direction. And as per usual, it is the American citizens who have had to bear the brunt of such uncertain trade practices, as those in power live in luxury.
Out of them, first-time home buyers have been the worst hit. After all, with such a high cost of housing, people really have to struggle to get the money they need to own a house. In addition to this, rent has also gone up. The demand for housing far overshadows the supply, and those who are renting out places to stay probably also have no choice but to charge high amounts to cover their cost of housing.
The CAP report also pointed out how the tariffs have worsened the housing crisis in 2025. Key building materials like steel mill products, copper, and aluminum face a 50% tariff. Softwood lumber is subject to a 10% tariff and a number of anti-dumping and countervailing duty tariff rates. Upholstered products, kitchen cabinets, and vanities are also set to be slapped with higher tariff rates next year.
These tariffs will add roughly $30 billion to the annual cost of investment in residential structures in 2027. Around $27 billion of that figure will affect the cost of constructing new homes and apartments. The report states that this would effectively raise the cost of building a house by 3.3% by the time 2027 comes around. At current rates, the tariffs add $17,500 in costs per new home.
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