With former President Donald Trump back in office and implementing new tariffs on Canada and Mexico, industries across the U.S. are bracing for potential price increases—including the housing market. Tariffs on lumber, steel, aluminum, and other building materials could lead to higher costs for new home construction, directly affecting prices for homebuyers in Austin, Texas. While it’s too early to know the full impact, here’s what we can expect and how it could influence Austin’s real estate market.
How Tariffs Affect Home Construction Costs
New home construction relies heavily on imported materials, especially softwood lumber from Canada and steel and aluminum from Mexico. If these materials become more expensive due to tariffs, homebuilders in Austin will likely see their costs rise, which could lead to:
- Higher new home prices: Builders may pass increased material costs onto buyers.
- Slower construction: Some projects may be delayed or scaled back to control costs.
- Increased demand for resale homes: If new builds become too expensive, more buyers may turn to existing homes.
Lumber Tariffs: The Biggest Concern for Austin’s Homebuilders
Austin has been one of the fastest-growing housing markets in the country, with thousands of new homes being built each year. Much of that construction depends on Canadian softwood lumber, which is commonly used for framing, flooring, and roofing. New tariffs could significantly increase the cost of this essential material.
Historically, tariffs on Canadian lumber have led to price spikes. When similar tariffs were imposed in 2017, the National Association of Home Builders (NAHB) estimated that new home prices increased by $9,000 or more due to higher lumber costs. If the new tariffs follow a similar pattern, buyers in Austin could see higher price tags on newly built homes.
Steel and Aluminum Tariffs: How They May Affect Austin’s Housing Market
While lumber is a key material for single-family homes, steel and aluminum are crucial for multi-family developments, high-rise condos, and commercial buildings in Austin. Higher costs for these materials could lead to:
- More expensive condos and townhomes, which rely on steel framing.
- Slower development of new apartment complexes, affecting rental prices.
- Higher costs for renovations and home additions, as contractors pay more for metal-based materials.
Could This Make Austin’s Housing Market More Competitive?
Austin has seen a surge in housing inventory recently, but if new home construction slows due to higher costs, the market could become more competitive. Potential outcomes include:
- Increased competition for resale homes: If fewer new homes are built, demand for existing homes may rise.
- More bidding wars: Limited new inventory could push buyers to compete for available homes.
- Longer wait times for new builds: Buyers looking for new construction may have to deal with higher prices or extended build timelines.
What Can Homebuyers in Austin Do?
If you’re considering buying a home in Austin, here are some strategies to navigate potential price changes:
- Act sooner rather than later: If new home prices increase, buying now could save you money.
- Consider resale homes: While new builds may get more expensive, existing homes could be a more affordable option.
- Work with a knowledgeable real estate agent: An experienced realtor in Austin can help you find the best deals and navigate market changes.
Find the Right Home in Austin—Despite Market Changes
While tariffs may introduce uncertainty into the housing market, Austin remains a top destination for homebuyers due to its strong economy, job growth, and quality of life. Whether you’re looking for a new build or a resale home, working with an experienced realtor in Austin is the best way to make a smart, informed decision.
Contact Brendan Sanford today at (512) 696-0673 or email him at [email protected] to discuss your home-buying options. With the help of an experienced realtor in Austin, you can navigate market changes and find the perfect home at the right price.