T
he ripple effects of tariffs are being felt across the US real estate landscape, with President Trump's latest trade move sending shockwaves through the homebuilding industry. As part of a 90-day tariff reprieve for several countries, China's tariff was jacked up to a staggering 125%. The consequences are already being felt in the construction sector, where uncertainty is mounting due to rising material costs.

    According to Darrick Barker, CEO of Nectar, a commercial real estate investment firm, tariffs are wreaking havoc on builders' bottom lines. "China alone accounts for 27% of typical residential construction budget materials," he notes, "which means a huge hit to material costs." As a result, Barker predicts that builders will construct fewer homes, leading to a decline in construction across the board.

    The impact won't be limited to new builds, either. Rental and sales markets are also expected to feel the pinch as tariffs create uncertainty among renters and buyers. "If people start to doubt the economy," Barker explains, "they're less likely to make that next move – whether it's upgrading from a studio to a one-bedroom or going solo from renting with roommates." The volatility brought on by tariffs will only exacerbate this trend, making investors and lenders more cautious in their dealings. As Barker puts it, "the uncertainty is going to make them more conservative, less likely to write that check."