President Donald Trump’s return to the White House in 2025 left the homebuilding industry bracing for major impacts.
Several of Trump’s early moves are already rippling across the housing market:
Tariffs
On April 9, Trump set a 90-day 10% baseline on nearly all of the country-specific reciprocal tariffs. Countries such as Cambodia and China maintained higher tariffs during the majority of this time. The 90-day reprieve was to allow for negotiations time. The end date for President Trump's suspension of country-specific reciprocal tariffs is July 9. Tariffs are set to go back into effect after this date, unless changes are made.
A trade deal was reached with China but key issues linger
On June 26: U.S. and China struck a trade agreement
China is to ease rare earth export limits
U.S. to lift some export controls
Details are still pending
Major disputes, such as trade deficits and unfair practices are still unresolved
Why it matters: Higher material costs from tariffed countries could hit builders and buyers alike.
According to NewHomeSource, “even a modest rise in tariff rates can send ripple effects through the entire supply chain, impacting both construction timelines and budgets.”
Global supply networks remain fragile following pandemic-era disruptions. Tariffs could amplify price volatility, especially for multifamily and affordable housing projects with tight margins.
“A lot of the uncertainty [in the housing market] comes down to tariffs,” said NewHomeSource chief economist Ali Wolf.
DOGE/Budget Cuts
Trump’s proposed Department of Government Efficiency (DOGE) has recommended deep cuts to several federal housing and energy programs. The Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE) faces major rollbacks in fiscal year 2026.
Why it matters: Cuts could hit home prices and inventory — fast. Fewer jobs = fewer buyers = more sellers looking to get ahead of a downturn.
Local businesses tied to those jobs — restaurants, contractors, service workers — could also take a hit.
“There is no historic precedence, outside of base realignment actions, for large-scale layoffs of federal workers,” said Terry L. Clower, Ph.D., of George Mason University. “None that I can think of that involve large reductions in force (RIFs) of civilian workers.
“For some markets, economic recovery does not happen quickly enough. Eventually, you can find a need to raze abandoned homes to help shore up the values for homeowners who stay.”
Labor Shortages & Immigration
Perhaps the most immediate concern for builders in 2025: A tightening labor market driven by lower immigration.
Why it Matters: Lower immigration rates could lead to labor shortages.
Over the early months of 2025, the Trump administration has moved to remove Temporary Protected Status (TPS) from Haitians and Venezuelans.
In March 2025, Trump also announced plans to revoke the statuses of people who entered the U.S. through a humanitarian parole program that had allowed Cubans, Haitians, Nicaraguans, and Venezuelans to stay and work for up to two years. A federal judge blocked that move in April, but the industry is already on edge.
At the end of the Joe Biden administration, as many as 40% of the estimated population of 14 million undocumented immigrants had some authorization to live or work in the U.S., according to The New York Times. Trump has moved quickly to end several of those protections.
Immigrants are critical to the new home construction workforce in the U.S., and builders say immigration crackdowns and deportation threats could shrink their crews and raise home prices.
“Based on our analysis of IPUMS data, over 25% of workers actively employed in the construction industry in 2022 were foreign-born,” said Sean Fergus, Zonda’s executive director of economic research. “Any combination of decreased immigration or crackdowns on current undocumented workers would almost certainly drive construction costs up in select markets due to labor shortages, if new home starts remain near current levels.
“Sunbelt states more proximate to the border with Mexico, which also generally have the highest new home construction activity, would likely be particularly impacted.”
The Bottom Line:
• Trump’s return to the White House is shaking the foundation of new construction.
• Tariffs could spike material costs.
• Budget cuts may slash demand in federal job hubs.
• Immigration crackdowns risk shrinking the labor force.
• Builders face tighter margins.
• Buyers could see slower builds and higher prices.
• The pressure is on, especially in high-growth, high-risk markets.
