Yesterday, tariffs went into effect for several U.S. trading partners. Jeff Andrews of HousingWire reports that tariffs on steel, lumber, and various goods from China, Mexico, and Canada will add further uncertainty to an already volatile market. While Trump’s tariff decisions have been unpredictable, home builders—who rely on stable costs—are looking for clarity as they brace for potential price increases.

Ana Swanson of the New York Times reports that Canadian Prime Minister Justin Trudeau announced Canada’s own tariffs on $30 billion worth of U.S. goods, with further measures to follow. The tariffs triggered a global market downturn, with U.S., European, and Canadian stock indexes dropping amid concerns over escalating trade tensions. Meanwhile, China and Mexico have vowed more countermeasures, intensifying fears of a prolonged trade war.

Levi W. Barrett of Reuters discusses the impact of Trump’s new steel and aluminum tariffs on construction, emphasizing the need to review contract terms for pricing and escalation clauses. These tariffs could drive up material costs, delay projects, and force contractors to renegotiate terms. While some relief may come from existing contract provisions, industry players seek to adjust agreements to mitigate risks proactively.

Keith Griffith of Realtor.com reports that uncertainty over President Trump’s tariffs is dampening homebuilders’ growth expectations, with the National Association of Home Builders (NAHB) forecasting just 0.2% growth in single-family starts this year. While builders welcome deregulation and tax cuts, they fear rising material costs from tariffs on Chinese goods and potential new levies on Canada and Mexico. Labor shortages from Trump’s immigration policies add further risk while growing competition from existing home sales could pressure new construction even as the housing shortage persists.

Source: Realtor.com (March 2025)

Scott Budman of NBC concurs that President Trump’s latest tariffs could drive up construction costs, particularly for commercial projects that rely heavily on steel and aluminum. While details on timing and rates remain uncertain, industry experts warn that rising material costs could slow 

That said, Den Shewman of MortgagePoint reports that despite claims that rising lumber costs drive up home prices, a U.S. Lumber Coalition study finds minimal impact on housing affordability. Since 2016, U.S. mills have expanded capacity, supplying 95% of domestic needs, offsetting reduced Canadian imports. Lumber accounts for just 1.7% of a new home’s cost, with tariffs on Canadian lumber making up only 0.04%.

Rents

Zumper’s new National Rent Report for February was recently released, showing a 2.9% annual increase in median one-bedroom rents to $1,525, with two-bedroom rents rising 3.7% to $1,905, signaling accelerating growth. Sun Belt markets are stabilizing as new supply peaks, with strong demand absorbing inventory. Lincoln and Omaha lead the nation in annual rent increases, exceeding 20%. Meanwhile, New York City saw continued rent growth, while Los Angeles experienced the steepest monthly decline among top markets. The uptick in rent prices may pose inflationary challenges for the Federal Reserve, potentially impacting future rate cuts.

Source: Zumper (March 2025)

Zumper CEO Anthemos Georgiades comments on the state of the market: 

“Although shelter inflation has eased in recent months, its lagging nature—due to the way it’s calculated—means the full impact has yet to be realized…The Cost of Shelter CPI incorporates existing paid rents, whereas Zumper’s national rent index serves as a leading indicator, reflecting market rents today. As a result, the annual rent increases seen in our most recent data are likely to be reflected in CPI metrics over the coming months.”

Similarly, Apartment List released its National Rent Report showing a 0.3% month-over-month rent increase in February, breaking a six-month decline, while year-over-year growth remains negative at -0.4%. The national median rent now stands at $1,375, down 4.6% from its August 2022 peak but still nearly 20% higher than January 2021. Vacancy rates have hit a record 6.9% due to a continued supply boom, with 800,000 new units in the pipeline. While rents are rising in most major cities, Sun Belt metros like Austin, Denver, and Raleigh continue to see price declines due to rapid multifamily expansion.

Source: Apartment List (March 2025)

Despite a slight monthly rent increase, year-over-year rent growth remains negative at -0.4%, marking the third straight winter of sharper-than-normal seasonal declines. An influx of new supply and softer demand have pushed the national median rent 4.6% below its mid-2022 peak, now $5 lower than a year ago and $67 below August 2022, though still $228 higher than January 2021.

Yardi Matrix’s National Multifamily Rent Report has similar findings, with rent growth resuming in January 2025. Asking rents rose $3 to $1,746, up 0.8% year-over-year after six months of declines. Northeast and Midwest metros led gains, while Austin (-5.4%) remained the weakest market. The national occupancy rate fell to 94.5%, the lowest since 2014, due to strong supply outpacing demand, particularly in Sun Belt metros. Single-family rental (SFR) rents rebounded, up $5 to $2,157, though annual growth remained negative.

The recently released January 2025 Apartments.com Rent Report shows national average rents at $1,556 for a one-bedroom and $1,809 for a two-bedroom, with annual rent growth slowing to 0.9%—a stark contrast to the nearly 10% growth in early 2022. Sun Belt cities, especially Austin (-4.2%) and San Antonio (-1.7%), continue to see rent declines due to oversupply, while Providence (+3.9%), Rochester (+3.5%), and Grand Rapids (+3.3%) led in rent increases. Of note, rent concessions have surged to 39% of communities, up from 7% in 2022.

Florida

Lily Katz and Grishma Bhattarai of Redfin report that Florida’s housing inventory surged 23% year-over-year in January, reaching a record 172,209 homes for sale—the highest level since 2012. A mix of cooling demand, rising insurance costs, HOA fees, and an influx of newly built homes has led to longer listing times and stagnant inventory. The condo market, in particular, is struggling as new structural regulations drive HOA fees higher.

Source: Redfin (March 2025)

Giulia Carbonaro of Newsweek reports on Florida’s single-family home inventory specifically, which has surged 37.6% year-over-year, the highest in a decade, signaling a shift to a buyer’s market. After years of rapid growth driven by remote work and new construction, high mortgage rates (7%), rising property insurance costs, and new condo regulations have cooled demand, forcing sellers to slash prices. The state now has eight months’ worth of housing supply, up from six last year, as new builds and aging condos flood the market. While Florida led home construction post-pandemic, many properties now sit unsold, pushing prices downward.

Alice Wright of The Daily Mail reports that Florida’s housing crisis is hitting condo owners particularly hard, as rising HOA fees and skyrocketing insurance costs have forced many to sell. New regulations passed after the Surfside condo collapse now require older buildings to undergo mandatory structural inspections and set aside additional funds for repairs, leading to massive fee hikes. Many homeowners now face HOA payments exceeding their mortgages, triggering a wave of distressed sales and steep price cuts, with some properties slashing up to 40% off asking prices.

That said, Lily Katz and Sheharyar Bokhari of Redfin report that inland Florida condo prices have risen 5% year-over-year. In contrast, coastal condos have declined due to soaring HOA fees and insurance costs. Unlike older, high-rise buildings along the Gulf and Atlantic coasts, inland condos are newer, face fewer regulations, and have lower disaster risk, making them more affordable.