Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Investing

Trump tariffs could prove to be a menace for homebuyers: here’s why

admin by admin
March 6, 2025
in Investing
0
Trump tariffs could prove to be a menace for homebuyers: here’s why
0
SHARES
5
VIEWS
Share on FacebookShare on Twitter

US housing stocks are having a hard time this year amidst higher tariffs the Trump administration has announced on the likes of Canada and Mexico.

Washington relies significantly on foreign imports for materials essential for home construction. These include cement, aluminum, steel, wood products, and even some appliances.  

As a result, the cost of building a house will likely increase materially in the wake of Trump tariffs, according to a recent report from CoreLogic.

That’s part of the reason why the iShares US Home Construction exchange-trade fund (ETF) has lost nearly 12% since late January.

Canada and Mexico export two key home construction materials

In particular, the US relies on Canada and Mexico for two essential home construction materials: gypsum products including lime and softwood lumber.

The world’s largest economy imports nearly 70% of the softwood lumber from Canada while 71% of the gypsum products it requires come from Mexico.

“Even incremental increases in the cost of materials, labour, and equipment make it that much more difficult to build a home profitably,” according to CoreLogic’s executive Pete Carroll.

Trump tariffs will make it significantly more difficult for the US to close the critical gap in housing supply, he added in a statement on Thursday.

US home prices could increase by up to $22,000 in 2025

All in all, the information services provider expects Trump tariffs to increase construction costs by up to 6% over the next 12 months.

Such an increase will raise sticker prices on new homes by $17,000 to $22,000, as per a CoreLogic estimate.

That’s significant considering the average price of building a home in the US already sits at a whopping $422,000.

US housing stocks are seeing pressure this year as tariffs and the related increase in construction costs could hurt affordability and prove to be a menace for the first-time homebuyers in 2025.

Investors should note, however, that homebuilders are broadly known to be dividend stocks.

US continues to grapple with a housing shortage

What’s also worth mentioning is that Trump tariffs do not paint a rosy picture for construction materials that are produced within the United States either.

Recent data indicates that “a rush on domestic materials would overwhelm current production,” and may lead to supply shortages and higher prices over the medium to long term, according to the CoreLogic report.

And “as builders pass extra costs on to homebuyers, housing will become less affordable” in the US, said Matt Saunders of John Burns Research & Consulting in a recent interview with CNBC.

Note that housing shortage in the United States is a significant concern that has built over decades. The country currently faces a deficit of about 4.5 million homes, as demand continues to outpace supply.

The post Trump tariffs could prove to be a menace for homebuyers: here’s why appeared first on Invezz

Previous Post

Interview: ‘We anticipate short-term pricing pressures,’ says Euro Panel Products MD Rajesh Shah on Trump tariffs

Next Post

Alibaba leads Chinese tech rally with DeepSeek rival launch: What investors need to know

admin

admin

Next Post
Alibaba leads Chinese tech rally with DeepSeek rival launch: What investors need to know

Alibaba leads Chinese tech rally with DeepSeek rival launch: What investors need to know

Trending News

Goldman Sachs upgrades Yum! Brands: here’s why

Goldman Sachs upgrades Yum! Brands: here’s why

June 4, 2025
The cruellest month

The cruellest month

May 6, 2025
Looking for 75% return within a year? Buy this solar stock today

Looking for 75% return within a year? Buy this solar stock today

May 31, 2025
Subscribe to Insightful Word


    Recent News

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    August 28, 2025
    SentinelOne stock price forecast ahead of earnings: buy or sell?

    SentinelOne stock price forecast ahead of earnings: buy or sell?

    August 28, 2025
    Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    August 28, 2025
    Urban Outfitters stock slides 4% despite strong quarter on cautious outlook

    Urban Outfitters stock slides 4% despite strong quarter on cautious outlook

    August 28, 2025

    Recent News

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in

    August 28, 2025
    SentinelOne stock price forecast ahead of earnings: buy or sell?

    SentinelOne stock price forecast ahead of earnings: buy or sell?

    August 28, 2025

    Latest News

    • Nvidia shares fall on China sales exclusion, weaker data center sales: analysts weigh in
    • SentinelOne stock price forecast ahead of earnings: buy or sell?
    • Tesla wants millions of robotaxis by 2025, but will Waymo win the long game?

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.