Tariffs return — and the price may be our homes

By : J. David Chapman/April 17, 2025

President Trump’s latest round of tariffs landed last week with a familiar thud — not in Beijing or Brussels, but right here at home. While the headlines focused on geopolitics, the real story, at least for those of us in real estate, is what happens when the cost of building materials jumps overnight.

Under the new policy, a 10% baseline tariff now applies to all imports, with steeper penalties for goods from China and the EU. That means everything from lumber and steel to appliances and light fixtures just got more expensive — again.

The National Association of Home Builders estimates the tariffs could add $9,200 to the cost of a new single-family home. That’s not a blip. That’s a dealbreaker. It means projects that were penciled last week no longer work. Builders are reworking estimates. Developers are hitting pause. Renovations will slow. Tight budgets will break.

We’ve been here before. During Trump’s first term, tariffs on Canadian lumber and Chinese goods threw construction markets into chaos. Prices skyrocketed, affordable housing projects were shelved, and the cost to build or improve anything became unpredictable. Then came the pandemic, supply chain snarls, and a historic run-up in housing costs. Now, just as the market was finding some footing, we’re facing another hit.

There’s irony here. On the same day these tariffs took effect, mortgage rates dipped. Spooked investors fled to U.S. Treasury bonds, nudging 30-year fixed rates from 6.75% to 6.55%. But what good is cheaper borrowing if the thing you’re borrowing to build suddenly costs more?

The damage won’t be evenly spread. High-growth states like Oklahoma, where housing demand remains strong, could feel it acutely. And developers working on tight margins — especially those building missing-middle or workforce housing — have the least room to maneuver. Some deals will survive. Others won’t.

Yes, tariffs are pitched as long-term plays to boost domestic manufacturing and could ultimately help our country and economy. But the short-term effects are real and local. A global chess move becomes a canceled duplex on a downtown block. A foreign policy flex becomes another bump in an already steep hill for housing affordability.

If trade wars must be fought, and maybe they do, let’s be honest about who’s footing the bill.

J. David Chapman, Ph.D., is professor of finance & real estate at The University of Central Oklahoma (jchapman7@uco.edu).