President Donald Trump’s proposed 25% tariffs on steel and aluminum imports from Canada and Mexico could further strain the U.S. housing market, raising construction costs and exacerbating the housing shortage, according to industry experts and lawmakers.
With the nation facing an estimated shortfall of six million homes, the potential price increases on essential building materials are raising concerns about affordability for American families.
The National Association of Home Builders (NAHB) and a coalition of lawmakers led by Representative Jim Costa have warned that the tariffs could drive up home prices by billions of dollars.
Canada, the largest supplier of steel to the U.S., would be hit particularly hard, with additional tariffs on Canadian lumber pushing overall duties to nearly 40%. As housing costs continue to rise, the potential impact on homebuyers and the broader economy is drawing increased scrutiny.
Tariffs Expected to Increase Construction Costs
The U.S. housing market is already struggling with rising construction costs, supply chain disruptions, and labor shortages, according to the NAHB. Trump’s proposed tariffs would further increase the price of materials, adding an estimated $4 billion to the cost of imported construction supplies.
“Tariffs on building materials raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices,” the NAHB stated on its website. The association has described the tariffs as a “tax on American builders, homebuyers, and consumers”, arguing that they will slow down housing construction at a time when supply is already critically low.
Costa, in a letter signed by 44 House Democrats, urged Trump to reconsider the measures, stating that they could “exacerbate the nation’s housing affordability crisis”. He also emphasized that with steel and aluminum essential to home construction, the added costs would put further pressure on affordability, particularly in states where housing shortages are most severe.
Potential Trade Disputes and Economic Fallout
Beyond the domestic housing impact, the tariffs risk triggering a broader trade dispute with Canada and Mexico. Chrystia Freeland, Canada’s former finance minister and deputy prime minister, has vowed to retaliate with “surgical” reprisals against U.S. trade measures, stating that Canada would respond in a way that “inflicts the biggest trade blow that the United States has ever endured”.
The Biden administration has yet to take a formal stance on the tariffs, but lawmakers and trade experts have warned that such measures could disrupt the supply chain, drive up consumer costs, and further strain U.S.-Canada trade relations. Meanwhile, a White House spokesperson defended Trump’s policy, arguing that tariffs are part of a broader economic strategy to “level the playing field” for American industries.
