Can You Still Get Top Dollar? What Tariffs Could Mean for 2025 Home Sellers

Tariffs imposed by the Trump administration (along with threats of future additional ones) have escalated trade wars between the United States and several of its main trade partners. Products from Canada, China, and Mexico, which account for more than one-third of the goods imported into the United States, are currently subject to tariff hikes ranging from 10% to 145%, prompting retaliatory tariffs from those countries on US goods in response.

Reacting to the on-again/off-again tariff talk coming from Washington, DC, turbulence in the U.S. stock market is prompting some economic experts to predict a recession, with significant implications for the U.S. and global economy. An economic downturn could also contribute to a slowdown of an already uncertain American housing market roiled by high interest rates and still-low inventory.

If you plan to sell or buy a home in 2025, here’s what you need to know about the latest tariffs and how they may affect the US housing market.

What are tariffs?

Tariffs are taxes applied to goods bought from other countries, typically a percentage of the product’s value. For example, a 10% tariff on a $10 product is $1, making the importer’s cost $11.

In the United States, tariffs are collected at ports of entry by Customs & Border Protection and paid to the U.S. Treasury. The importing company pays the tariffs, not the foreign government where the products originated, which is a common misconception.

To account for this expense increase, companies selling the goods domestically typically raise their prices, passing the cost on to consumers.

How will tariffs affect the housing industry?

The housing market has struggled in recent years, grappling with inventory shortages, rising home prices, and climbing mortgage rates. Tariffs on construction materials from Canada, Mexico, and China will likely exacerbate the problems as raw materials become more expensive and builders’ costs increase. As in other sectors, those increased costs will likely be passed on to homebuyers as much as possible.

Higher costs for building materials

The National Association of Homebuilders reports that the cost of construction materials is 34% higher than in December 2020. With new tariffs in place, material costs will rise even higher. The NAHB reports that home builders expect the average cost of home construction to increase by $9,200 per home.

Canadian softwood lumber is used in a large percentage of US home building and is currently taxed at 14.5%. The additional proposed 25% tariff would bring the import duty to almost 40%. In other words, a $200,000 order of Canadian lumber would cost a builder around $280,000.

Tariffs will impact gypsum, a main component in drywall and cement. In 2023 the US imported $215m of gypsum, making it the largest gypsum importer in the world according to data from trade platform OEC World. America imports gypsum from Mexico, Canada, Spain, and other countries.

While the US produces most of its steel domestically, it imports about 25% to meet the nation’s demand, with much of it coming from Mexico and Canada, according to Reuters. Appliances made with Chinese steel and aluminum parts could see double-digit increases for items like refrigerators, dishwashers, as well as HVAC systems, plumbing, and electrical materials.

Even if tariffs encourage construction firms to turn to sourcing more building materials domestically, the increased demand could overwhelm an already overburdened supply chain. Bottlenecks and delays could continue to drive home prices up.

Housing affordability crisis

According to their monthly housing market trends report, Realtor.com reported the median national average price for single-family homes in March 2025 was $424,900. If all the tariffs that the Trump administration is promising are enacted, and construction costs continue to rise, and supply continues to stagnate or decrease, housing affordability could be out of reach for many middle-class home buyers.

No one can predict with certainty what will happen to the U.S. markets or economy as a result of the new tariff policies or what action the Federal Reserve or federal government may take in response. If the Fed keeps the prime interest rate relatively steady, mortgage rates will likely remain elevated, ranging from 6.3% to just under 7% based on the type of loan, according to current mortgage rate data from FreddieMac. This may strain first-time homebuyers already pushing the boundaries of their budgets. Government and non-profit home-buying programs for first-timers may help ease that pinch.

Selling a home in 2025

In a shifting, unpredictable market, home sellers should focus on tried-and-true strategies to stay competitive and get top dollar for their property in 2025.

One potential benefit for home sellers in the current climate is that the buying pool for existing homes could increase. If construction prices continue to rise, availability is delayed, or supply decreases, home buyers looking for new builds may instead set their sights on the existing home market.

No matter the market conditions, selling a home always involves several influencing factors, some of which you can control and others you cannot. Keep the following advice in mind if you’re planning to sell.

Work with a professional. Data from Realtor.com in February 2025 shows that the number of  US homes actively for sale has grown by 27.5% compared to 2024, which means more competition among sellers. Add to that consumer uncertainty, unpredictable mortgage rates, and local market nuances, and selling your home is more complicated than just posting a listing.

Find an experienced agent who knows the ins and outs of your metro area and who has weathered the ups and downs of turbulent markets; a steady hand to guide your decisions is well worth the investment.

Know your market. Regardless of what’s happening nationally, don’t lose sight of your market. Homes have risen in value in some regions but are losing value in others. In some metros, homes are on the market for hours, while in other zip codes, they linger for months. Understand if your market currently favors buyers, sellers, or is neutral so you can strategize accordingly.

Invest in professional photos. Almost 100% of buyers start their home search online, so high-quality, professional photos are a must. Declutter your home, arrange for professional, neutral staging, and complete any upgrade or repair projects to be ready in time for peak selling season.

Price appropriately. Even in a seller’s market, getting top dollar requires several factors to align in your favor. Your agent can help develop a realistic price plan based on market comps, available housing stock, and other details particular to your property.

Pricing too high may discourage buyers from considering your home, and you may need to drop the price if the property sits too long on the market. Too low, and you may leave money on the table. Selling your home this year requires careful consideration of your requirements and goals weighed against circumstances affecting the economic climate, both nationally and locally. Explore your options thoroughly to choose the most advantageous time to sell.

Written by Billy Guteng. April 28, 2025

Billy is a content writer for Kukun. He was born in France, and has lived in multiple cities around the world ever since. He loves art, design and architecture as well as construction and real estate.