Rising Costs & Delays: How Tariffs and Labor Shortages Are Shaping Homebuilding in 2025

The cost of building a home is rising—again. And this time, it’s not just inflation or supply chain issues. New tariffs on foreign steel, aluminum, and building materials are adding significant costs for home builders. At the same time, a tightening labor market—especially among undocumented workers—could further drive up costs and cause construction delays.

For buyers, sellers, and real estate professionals, this isn’t just an industry headline. It’s a real-world shift that could impact home prices, affordability, and market inventory.

How Tariffs Are Impacting Homebuilding Costs

Recent tariffs have placed higher taxes on imported construction materials like:

• Steel and Aluminum – Used in framing, HVAC systems, roofing, and appliances.

• Tiles and Flooring – Many ceramic and porcelain tiles come from overseas manufacturers.

• Lumber and Finished Wood Products – While tariffs on Canadian lumber have fluctuated, additional restrictions mean higher costs for builders.

When materials cost more, builders have two choices:

1. Pass the cost on to buyers through higher home prices.

2. Delay or cancel projects if the numbers no longer make sense.

Neither option is good news for buyers looking for affordable homes in an already tight market.

The Labor Shortage: Another Price Pressure on Builders

The other issue? Fewer workers.

The construction industry has relied on immigrant labor—especially undocumented workers—for years. Stricter immigration policies and enforcement have reduced the available workforce, making it harder for builders to keep up with demand.

• Fewer workers = fewer homes built.

• Skilled labor costs are rising. Builders are offering higher wages to attract workers, which further increases home prices.

• Delays are becoming more common. Even when materials are available, if there aren't enough workers, projects slow down or stall altogether.

A shrinking labor force and higher material costs are a double hit to the housing market, making new construction more expensive and harder to deliver on time.

What This Means for Buyers & Sellers

For homebuyers, expect:

• Higher new construction prices as builders pass along costs.

• More competition for move-in-ready homes, as fewer new homes are available.

• Longer build times if you're buying a new home under construction.

For sellers, this could be good news—low inventory often pushes resale home prices higher, as buyers have fewer choices.

The Takeaway: A Market Shift in Progress

With tariffs raising costs and labor shortages slowing construction, real estate is adjusting once again. If you're in the market to buy, it's more important than ever to have an experienced agent who knows how to navigate a changing market.

Want expert guidance on buying or selling in today's landscape? Let’s talk. 🚀