We just figured out how to make the housing shortage worse without touching a single zoning law: tariffs. Between steel duties, lumber levies, and a 50% tax on aluminum, building a new home now costs $10,900 more than it did before. And if you think that's bad, wait until you hear what it does to supply over the next five years. Grab a hard hat and your calculator.

Story: The numbers are in, and they're not subtle. The National Association of Home Builders estimates that current tariffs are adding $10,900 to the cost of building an average new home, based on the 7% of residential construction materials that originate from foreign sources and the 50% tariff rate now slapped on many essential inputs. That might sound manageable until you zoom out: building material costs have already climbed 40% since December 2020, and more than 60% of builders surveyed by NAHB report seeing direct cost increases from tariffs. The damage is stacking, not stabilizing. Steel and aluminum tariffs hit 50% under Section 232. Canadian lumber, which accounts for 80-85% of U.S. softwood imports and roughly a quarter of total supply, got hammered with a 45% combined price jump after new antidumping duties and a 10% Section 232 tariff on all timber. More than 60% of major home appliances contain imported parts or assemblies, meaning tariff costs ripple through HVAC systems, wiring, fixtures, and kitchen packages.

So What? For investors and property managers, this is counterintuitively good news for existing housing stock, and terrible news for affordability. Every home that doesn't get built is one more household that stays in the rental pool. If you own single-family rentals or multifamily units, the tariff-driven construction slowdown effectively tightens future supply on your behalf. Fewer new builds means less competition from shiny new inventory, and it means the already-acute starter home shortage gets worse.

What’s Next? Watch three things closely. First, housing starts data: any sustained decline from the current pace signals that builders are shelving projects rather than eating margin. Multifamily starts are already projected to fall 5% in 2026 and another 6% in 2027 (NAHB), so adding tariff headwinds to an already-cooling pipeline could accelerate the pullback. Second, monitor U.S.-Canada trade dynamics. Canada supplies 85% of our softwood lumber imports, and the 45% price premium is unsustainable for builders relying on Canadian wood; any relief there moves the needle more than any other single material. Third, watch the ROAD to Housing Act reconciliation. The bill includes provisions to streamline permitting and expand manufactured housing, which could offset some tariff damage on the supply side, but only if the House and Senate resolve their differences before election-season paralysis sets in. The bottom line: tariffs are a stealth tax on every future home in America, and the longer they stay, the wider the gap between supply and demand grows. Your existing portfolio just got a little more valuable by default.

Source: NAHB

Trying to decide whether to sell or rent your house? In this video, we break down how to analyze cash flow, equity, and long-term goals so you can make the right decision. Whether you're moving, investing, or building wealth, this guide will help you choose between selling your home or turning it into a rental property.

Top Weekly Stories:

1️⃣ Housing: Median list prices have now fallen year-over-year for five straight months to $415,450 (-2.2% YoY), while active inventory climbed 8.1% to 964,477 listings, but the recovery is plateauing, and homes are sitting four days longer than last year in 43 of the top 50 metros. 🪺 More

2️⃣ Rentals: National median asking rents hit a four-year low in February, falling 1.7% YoY for the 30th consecutive month of decline, with Austin (-18.2%), Birmingham (-17.1%), and Memphis (-16.1%) posting the deepest cumulative drops since the pandemic. 🪺 More

3️⃣ Mortgages: The 30-year fixed rate climbed back to 6.46% (Freddie Mac weekly average, April 2) after briefly dipping below 6% earlier this year, as Iran-related inflation fears pushed Treasury yields higher for a fifth consecutive week. 🪺 More

4️⃣ Interesting Trends: Mom-and-pop landlord on-time rent collections rose to 83.9% in March (the fifth increase in six months) while apartment property values posted their first positive year-over-year reading (+0.14%) since early 2023, signaling stabilization after years of rate-driven repricing. 🪺 More

5️⃣ Policy Changes: The House and Senate have entered reconciliation talks on the 21st Century ROAD to Housing Act, with the key sticking point being a Senate provision that would force institutional investors owning 350+ single-family homes to sell newly built rental properties within seven years or face penalties. 🪺 More

📰 Article Highlight: How to Spot a Good Wholesale Real Estate Deal

💸 Off-Market Deal: Spacious 4BR Bessemer Rental in Bessemer, AL

🪺Forward this email to a friend 💕