Tariffs To Hinder Construction Of New U.S. Homes

A survey conducted by Reuters has revealed that Trump’s tariffs are likely to cause a slowdown in U.S. home construction, Jenny McCall reported for Yahoo Finance.

Construction spending unexpectedly declined in April.

U.S. home prices are expected to rise steadily over the coming years due to an anticipated further decline in mortgage rates, according to property experts in the survey.

However, the near-unanimous view among respondents was that President Donald Trump’s tariffs would hinder affordable home construction.

Construction spending unexpectedly declined in April, constrained by reduced outlays on single-family housing projects and a rising inventory of unsold homes. Most respondents said the situation faces additional challenges from the tariffs.

“While there’s still a lot of uncertainty about what level of tariffs will ultimately be implemented, they’re going to make it more expensive to build,” said Egan of Morgan Stanley.

“You’ll see either fewer homes built, smaller homes built, or a combination of both.”

When asked how the U.S. tariffs on major trading partners announced earlier this year would affect affordable home construction, nearly 90% — 21 out of 24 experts — said fewer homes would be built, including two who said “far fewer.” Three respondents said there would be no impact.