Washington, D.C. — As housing costs hit record highs, a new analysis from the Center for American Progress finds that the Trump administration’s tariffs on homebuilding materials will make the country’s housing shortage far worse. CAP estimates that President Donald Trump’s trade policies could reduce new home construction by 450,000 homes through 2030 and raise the average cost of building a home by $17,500.
Tariffs on essential building materials, such as lumber, copper, cabinets, and steel, are increasing construction costs by thousands of dollars per home, slowing home construction at a time when the United States is already short 2 million homes.
“Families are already struggling to afford a place to live, and the administration is adding fuel to the housing costs fire,” said Corey Husak, director of Tax Policy at CAP and co-author of the column. “These tariffs are a tax on builders and aspiring homeowners, raising construction costs, slowing the pace of new building, and pushing homeownership even further out of reach for millions of Americans.”
CAP’s analysis finds:
- Tariffs are sharply increasing building costs. Trump’s tariffs will add $27 billion to the annual cost of constructing new homes by 2027, effectively raising the cost of building a new home by about 3.3 percent.
- Tariffs will reduce housing construction. These higher costs will result in about 450,000 fewer new homes built from 2026 through 2030—equivalent to eliminating 6 percent of the homes constructed from 2020 to 2024.
- Tariffs mean higher costs on every home: Tariffs will add $17,500 in costs per home built today. If homebuilding falls as we project, tariff costs will rise to $18,500 per home in 2028, further worsening affordability in an already strained market.
- Tariffs add additional costs to already rising home prices. The tariff-driven slowdown will hit buyers after the average home price has already increased 31 percent since 2020, putting homeownership further out of reach for millions.
Despite claiming to want lower housing costs, the administration’s tariff policies are shrinking supply, raising prices, and deepening the nation’s housing shortage, undermining its stated housing goals.
Read the analysis: “Trump Administration Tariffs Could Result in 450,000 Fewer New Homes Through 2030” by Corey Husak, Natalie Baker, and Mimla Wardak
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].