Trump’s tariffs are spooking buyers, sellers, home builders, and suppliers, causing a widespread pause in the market.
Photo-Illustration: Curbed; Photo: Getty
In the last week, Holly Mumford, an architect and the founder of Hereabout, a company that sells predesigned home plans, has seen several alarming signs that her business, and the home-building business in general, may be in trouble. Immediately after Trump’s tariffs went into effect, she got an email from Form, a German-made cabinet company she often works with, saying it would not be taking any new orders at the moment. Then an exterior siding company she uses told her it would also be putting its projects on hold. Meanwhile, inquiries from new clients — she usually fields two or three introductory calls a week — have stopped entirely. People, understandably, are wary of starting projects right now. But Mumford says she’s most nervous for people who are mid-construction and in contract for the materials: “I don’t know how that will work. I can see it getting messy.” Anticipating that construction will cost significantly more owing to the tariffs, she’s trying to find ways to curb expenses and make costs more predictable for future clients — people with the money to build a 2,000-square-foot home, but not necessarily to hire an architect — like offering smaller home plans and redesigning the structural load to use thinner beams. But since her plans were already designed with affordability in mind, there’s not a lot of fat to trim. “I don’t know if the things I’m looking at now will move the needle enough, but I’m going to try,” Mumford says.
The real-estate industry entered 2025 with a fair amount of optimism. After years of sclerotic sales, inflation, and high mortgage interest rates that slowed new construction and pushed home ownership out of reach for a lot of Americans, things were finally turning around. The recession predicted in 2023 did not end up happening, and in New York, contract signings were up significantly: “We’ve been seeing it since the summer and into the new year — sales rising at four times the rate of inventory,” says Jonathan Miller of Miller Samuel, who previously dubbed 2025 the year of getting back to normal. “A lot of people have been waiting years for rates to come down and they decided that they weren’t going to wait anymore. Then we got this.” This, of course, being the Trump tariffs, which have roiled the stock market, raised renovation and construction costs considerably, and spooked just about everyone. “Agents are telling me that their clients are holding off — no one knows what’s going to happen,” says Bess Freedman, the CEO of Brown Harris Stevens. “One of them was a $10 million buyer: They said, ‘We’re taking a pause.’ It doesn’t necessarily mean they won’t go back into the market. But consumer confidence is in the toilet.” Freedman says that last week, she thought there might be some upside to the tariffs, like falling interest rates. But now any optimism is gone: “It feels disorganized and chaotic, and uncertainty and chaos are not good for any market,” she says. “It’s more strain on an already strained housing market.” Miller agrees: “This is peak uncertainty. The uncertainty has uncertainty.”
But broker Jacob Wood, an associate broker at Coldwell Banker Warburg, says that because of its wealth, New York is more insulated than the rest of the country from big economic shifts, so it’s unlikely that we’ll see any drastic changes; during the last recession and the beginning of COVID, home prices remained fairly stable. “The market reaction in New York City to these types of events is less a drop in pricing than a drop in activity,” he says. “I think we’ll see a decline in inventory and less contracts signed.” In other words, a return to the disappointing market of the last few years. Robert Elson, another agent at Coldwell Banker Warburg, has seen this already. “I have two clients who were deliberating listing early this spring — now or shortly. At the moment, they are both of the mind-set that waiting is better than acting ‘prematurely,’” he wrote in an email.
While people on the design-build side, like Mumford, are already seeing problems with suppliers and new business, the future of new construction in general is looking grim with the tariffs likely to raise the cost of construction and the administration’s immigration policies shrinking the industry’s largely immigrant workforce. Anthony Luna, the CEO of Coastline Equity, a commercial real-estate advisory and property-management firm, says that as soon as the tariffs went into effect, they saw material price increases of 15 to 25 percent on some projects. “And that was last week. If he follows through with the threat of 50 percent additional tariffs on China, it’s not only going to be more price increases: We’ll see supply-chain holdups worse than during COVID.” And those cost increases will be for pretty much everything — lumber from Canada, electrical supplies from China, appliances that are assembled here with parts from overseas. Costs that will, of course, be passed on to buyers and tenants. Maintenance costs for properties will also rise. Rents, which are already at all-time highs, will almost certainly go up even more, as landlords’ expenses rise, new construction slows, and sales fall off, pushing up demand.
Not everything will come to a grinding halt, says Eli Weiss, principal at Joy Construction, which develops a lot of affordable and mixed-income housing. “Most of the projects that are under construction right now, the materials were bought last year, not last week,” Weiss says. Falling interest rates could balance out construction cost increases, he adds, and it could all change tomorrow: “I don’t get the impression that these policies are set in stone.” Still, he admits, “if I were going to buy out a job today, I would go in with significant cost increases.” And, he adds, “I would do everything I could not to lock in a price right now.” At the moment, it seems, everyone is hopeful that Trump, known for his erratic policymaking, might change his mind before we enter a recession, unemployment skyrockets, and the damage becomes permanent. Another developer who specializes in conversions wrote in an email that they, like everyone else, are still processing the tariff news and are “hopeful things will get worked out.”
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