How Tariffs Could Impact the Housing Market

When we think about buying a home, we often focus on personal finances such as our credit scores, down payments, mortgage rates—but there are larger economic forces at play that can quietly affect how much home we can afford. One of those forces is tariffs. While tariffs may seem like something that only effects the price of small goods, they can actually have a very real impact on the home buying process as well, especially when it comes to the cost of new builds and materials.

Tariffs are essentially taxes placed on imported goods. When the U.S. places tariffs on items like steel, lumber, aluminum, or appliances, the prices of those materials often go up. This matters a lot in the world of new home construction, where materials make up a significant portion of a builder’s costs. If a builder has to pay more for these materials due to tariffs, that extra cost usually gets passed on to the buyer. As a result, new homes become more expensive, making it harder for buyers—especially first time buyers—to afford them.

Even if you're not planning to buy a brand-new home, tariffs can still affect your options. Rising costs of new construction can drive up prices across the entire housing market. When fewer people can afford to buy new homes, they may turn to existing homes instead, increasing demand and pushing up prices there too. This added pressure can make the competition even tougher in an already tight housing market, particularly in urban areas where inventory is low and demand is high.

For buyers who are working hard to build wealth and move toward homeownership, these price increases can be discouraging. It’s already challenging to save for a down payment, keep up with rising rents, and navigate credit requirements. Tariffs add another layer of difficulty by increasing the overall cost of buying or building a home. They can also affect the cost of appliances, fixtures, and even furniture—everything from refrigerators to light fixtures may carry higher price tags if imported materials are taxed.

Beyond the direct costs, tariffs can create uncertainty in the market. Builders may slow down construction if material prices are unstable, which can lead to fewer homes being built at a time when more are desperately needed. This contributes to the broader housing supply shortage, which again drives prices up and limits options for buyers.

While tariffs are a policy tool that are being claimed to be used to protect domestic industries or respond to trade disputes, they can have unintended consequences for everyday people. If you're planning to buy a home, especially a new build, it’s important to stay aware of these broader economic factors. Working with a knowledgeable real estate professional who understands the local market and can help you navigate changes is more important than ever.

Understanding how policies like tariffs impact your home buying journey puts you in a more empowered position. Even when the economy feels outside of your control, knowing the “why” behind rising prices or construction delays can help you plan smarter, save strategically, and make informed decisions that move you closer to owning a home—and building the kind of wealth that lasts.