The construction and costs of the housing could increase

He The United States real estate market was already fighting under the weight of high mortgage interest rates, to Low supply of existing housing for sale and historically high housing prices.

Now tariffs on construction materials are adding even more pressure.

Approximately 30% of the soft wood consumed in the US. UU. It is imported, in much of Canada. Wallboard, known as plaster, is imported from Mexico. The president of the 25%rate, Donald Trump, raised the assets of the two key commercial partners, will make these products much more expensive. He Mexico’s tariffs were postponed For a month on Monday, but they are still on the table in the future.

“More than 70% of imports of two essential materials in which housing builders, soft wood and plaster depend, come from Canada and Mexico, respectively,” wrote Carl Harris, president of the National Association of Housing Builders In a statement. “Tariffs on wood and other construction materials increase the cost of construction and discourage new development, and consumers end up paying for tariffs in the form of higher prices in the house.”

Housing prices are already up More than 40% since the beginning of the pandemic and were still 3.8% higher in November, compared to the previous November, according to the latest reading of the National Housing Price Index S&P Corelogic Case-Shiller. That annual increase was greater than 3.6% in October.

Duties over construction materials could further hinder the market.

“We believe that this could worsen the affordability crisis for first -time buyers. On the positive side, it could increase the pressure on Congress to promulgate policies that promote greater entry level construction, including expanded fiscal credit programs,” he wrote Jaret Seiberg, housing policy of TD Cowen Washington Research Group.

The NAHB is asking the Trump administration to exempt the construction materials of the 25%tariffs, pointing out its executive order on the first day of its presidency that sought to “expand the supply of housing.”

Although the United States has increased wood production in recent years, 70% of imports of sawmill and wood products in the country, $ 8.5 billion, come from Canada. They are already subject to a 14.5%rate, so Trump’s new policy would raise it to more than 39%.

And 71% of imports of lime and plaster products are from Mexico, for a total of $ 352 million. Other materials such as steel and appliances come from China. Triumph Put an additional 10% rate About China goods on Saturday.

The new tariffs on imports from China, Canada and Mexico could increase the costs of construction materials by $ 3 billion to $ 4 billion if all have effect, which affects the capacity of builders to complete projects, according to the NAHB.

It is likely that the rates hit smaller housing builders with tougher strict margins, but the big builders are not immune.

“Even with a smaller part of our wood from Canada, and some materials in Mexico, we will all be affected, which in turn can affect consumers and their ability to buy a house in the short term,” said Sheryl Palmer, CEO of the housing builder with headquarters in Arizona Taylor Morrison. “At a time when some consumers are still struggling to overcome higher interest rates, my sincere hope is that these will be of short duration.”

The builders are already having a shortage of labor that is only getting worse after the Trump administration began the mass deportations of undocumented immigrants. It is estimated that approximately 30% of construction workers are immigrants, and a significant proportion of these workers are undocumented, According to the National Immigration ForumAn immigration defense group.

“You can get them all out of the country, but who is going to build houses?” Bruce McNeilage said, CEO of Kinloch Partners, based in Nashville, a single -family rental housing developer.

While most of the effect of tariffs is on the construction of new homes, the existing market could also feel the effects. If the costs of other consumer goods increase, all potential buyers will have less spare effective to save for an initial payment.

There was also an expectation that interest rates would fall this year, but if inflation is heated again due to rates, rates could increase. This layers of economic realities and emotional perceptions of personal wealth could affect the most important market and the next spring market.