What Should Homebuilders And Investors Do As Trump Tariffs Loom?

President Donald Trump’s chaotic style of governing and use of tariffs is causing uncertainty for real estate investors and homebuilders, according to a report by John Burns Research and Consulting (JBREC). But there are things they can do to improve their positions.

Tariffs have been a consistent part of the Trump Administration‘s approach to global economics for years. Trump entered office with an unspoken message for foreign companies: Meet our demands or pay the price before selling goods to U.S. consumers. It’s caused headaches for homebuilders who are already sensitive to spikes in material costs and high interest rates in recent years.

The research and consulting firm said the bond market could demand higher yields as economic uncertainty continues. That change could make it harder for builders and developers to finance projects. To that end, JBREC anticipates reduced builder demand as a result of rising prices and supply chain disruptions.

“Building products companies that rely on imported raw materials or components will face higher input costs due to tariffs,” said Alex Thomas, John Burns’ senior macro research analyst.
Thomas recommended that homebuilders Identify areas where tariffs could significantly impact input costs and explore alternative sourcing options.
He also recommended homebuilders look toward automation to improve efficiency and labor costs while developing new products and technologies that can increase profit margins. Diversify into new markets to reduce reliance on the US market, particularly in regions less affected by trade disputes.

Real estate investors may also feel the heat from current and upcoming policy changes, according to John Burns. The firm points to elevated housing costs and higher interest rates as two key factors.

Thompas recommended that real estate investors factor in higher costs from property taxes, insurance, maintenance costs when doing their analysis work. He also said it’s worth considering fixed-rate debt and diversifying investments to reduce overall risk.