Surging Home Building Costs Caused by Trump Tariffs Could Result in 450,000 Fewer Homes by 2030

After campaigning last year on reducing the cost of living and as he attempts to claim progressive Democrats' push for affordability as his own, President Donald Trump's policies have been directly linked to making life more expensive for people across the US—and along with electricity, healthcare, and groceries, housing costs are set to rise, according to a new analysis out Tuesday, which examines the impact of Trump's tariffs.

The Center for American Progress (CAP) found that the impact on home construction materials by Trump's tariffs could force builders to scale back significantly over the next five years, reducing new home construction by 450,000 homes through 2030.

According to the analysis, the average cost of building a home in the coming years will increase by $17,500 if current home building rates continue.

"With the average home sales price having already risen by 31%—or over $120,000—since 2020, this tariff-induced change could put homeownership further out of reach for millions of Americans," said CAP.

Trump's tariffs are as high as 50% for some countries, and some of the highest levies have been imposed on key building materials, including lumber, copper, aluminum, and steel products. Imports of upholstered products and kitchen cabinets are set to face tariffs that could increase by up to 50%.

The tariffs were unveiled amid a growing housing affordability crisis, with the number of available homes falling short by 2 million units or more, according to some estimates.

Following the Great Recession, home construction has not returned to pre-2008 levels and the country requires "sustained, above-average construction rates to correct" the persistent underbuilding, according to CAP.

"Yet the Trump administration’s tariff policies are pushing home building in the opposite direction by raising construction costs, which will slow new construction activity, raise costs, and worsen housing affordability," reads the report by Cory Husak, Natalie Baker, and Mimla Wardak.

The analysis found that while Trump has insisted that the tariffs will target the countries that import goods to the US, but as with groceries—which have gone up in price by up to 40% at some stores—the levies on home building materials are projected to ultimately impact American families who are already struggling to afford healthcare and other essentials.

The tariffs are expected to 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%.

From 2030 onward, the number of new homes being built is expected to be down by 100,000 yearly.

"This would be equivalent to eliminating 6 percent of the homes constructed in the five years from 2020 to 2024," said CAP.

If home building falls as CAP projects, the cost of construction will rise to $18,500 per home in 2028, CAP projected.

“Families are already struggling to afford a place to live, and the administration is adding fuel to the housing costs fire,” said Husak, director of tax policy at CAP. “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.”

The group urged the federal government to act to stop the tariffs from continuously "driving up construction costs, slowing homebuilding, and worsening the nation’s already severe housing shortage."

"Building new housing supply is crucial to solving the housing shortage," said CAP, "and canceling tariffs on homebuilding materials is a necessary step to bring more housing online and improve housing affordability."