How New Tariffs Could Push Home Prices and Mortgage Rates Higher in 2025

As trade tensions rise, so do concerns about their impact on the housing market. At Peregrine Financial, we’re closely tracking how new tariffs are affecting home prices, construction costs, and lending conditions in 2025.

Tariffs on Building Materials Are Raising Construction Costs

New tariffs on imported goods like lumber, steel, and drywall are driving up the cost of building new homes. According to the National Association of Home Builders, these tariffs could add between $17,000 and $22,000 to the cost of a newly constructed home.

This increase comes at a time when affordability is already a challenge for many buyers, especially those dealing with higher interest rates and tighter lending standards.

Mortgage Rates Could Be Affected by Inflation

While mortgage rates have recently dropped to around 6.55% for a 30-year fixed loan, that relief may be short-lived. As tariffs drive up the cost of materials and potentially contribute to inflation, the Federal Reserve could be forced to keep interest rates higher for longer, making it more expensive to borrow.

Rising inflation may also push up home improvement costs and reduce the availability of affordable housing stock, especially in high-demand markets.

What This Means for Investors and Homebuyers

For homebuyers, higher construction costs and uncertain lending conditions can make it harder to find or finance a property. For real estate investors, these changes could create new opportunities—particularly in alternative markets or through tax-advantaged investment vehicles.

Get Expert Guidance from Peregrine Financial

The financial landscape is shifting, and making the right move now can help you stay ahead. Whether you’re a homebuyer, investor, or just looking to strengthen your retirement plan, Peregrine Financial is here to help.

Book a consultation to explore several flexible strategies that can support your goals in today’s changing market.