by Mike Colpitts 
Florida’s real estate market, which has seen rapid growth, is particularly vulnerable to President Donald Trump’s tariffs. The state’s population is growing, with people flocking to Florida due to the region’s attractive climate and higher quality of life. However, as the cost of building materials rise, Trumps tariffs hit housing hard as developers are likely to find it harder to meet demand.
Trump imposed significant tariffs on imports from key trading partners, including Canada and Mexico. These measures, with a 25% tariff on Canadian goods and a 10% tariff on Mexican imports, have profound implications for Florida’s real estate sector, primarily due to their impact on construction costs and housing affordability.
Florida heavily relies on lumber and gypsum, predominantly imported from Canada and Mexico. The National Association of Home Builders (NAHB) said, “More than 70% of the imports of two essential materials that home builders rely on—softwood lumber and gypsum—come from Canada and Mexico, respectively.” The tariffs on these materials has led to increased construction costs, with estimates suggesting an average increase of $9,200 per new home.
Escalation of Trumps Tariffs Hit Housing
This escalation poses a direct threat to new housing affordability. Builders facing higher material costs will be compelled to pass these costs onto consumers, resulting in elevated home prices. “Tariffs on lumber and other building materials increase the cost of construction and discourage new development,” said Carl Harris, chairman of the National Association of Home Builders. “Consumers end up paying for the tariffs in the form of higher home prices.”
Beyond the immediate impact on construction materials, the tariffs contribute to broader economic uncertainties on Florida’s real estate. Economists warn that the tariffs could lead to higher inflation and reduced consumer purchasing power, potentially dampening demand for new homes. The Associated Press reported that “tariffs could lead to job losses and economic uncertainty as businesses grapple with expensive supply chain adjustments.” In a market already challenged by high mortgage rates and limited new home inventory, these additional economic pressures could sideline potential buyers.
The labor force essential to Florida’s construction industry is also at risk. The Trump administration’s policies, including mass deportation plans, threaten to reduce the availability of immigrant labor, which constitutes a significant portion of the construction workforce. “You can run them all out of the country, but who’s going to build houses?” questioned Bruce McNeilage, CEO of Kinloch Partners. A diminished labor pool could lead to project delays and increased labor costs, exacerbating the challenges faced by builders and buyers alike.
NAHB Urges Reconsideration
In response to these developments, industry stakeholders have called for policy reconsiderations before Trumps tariffs hit housing hard. The National Association of Home Builders urged the administration to “exempt critical construction materials from such actions,” emphasizing the potential harm to housing affordability and supply.
Real estate professionals like Larry D. F. Maxwell, the CEO of the Florida Real Estate Development Association, says that inflationary tariffs are having a double-edged effect on developers. “On one hand, developers have to contend with rising material costs, which eat into profit margins. On the other hand, the increasing costs often get passed down to buyers, resulting in higher prices for homes and commercial properties.”
However, an upswing in resale home sales occurred during Trump’s first administration when he enacted a series of tariffs and many expect the same resurgence of sales to develop in the resale market as a result of the higher tariffs on the industry.
Trumps Tariffs Hit Housing
Florida’s real estate market is a bellwether for national trends. However, the increase in construction costs caused by tariffs is likely to impede the supply of new homes, contributing to a shortage of affordable housing.
The slowdown can already be seen in the construction of new homes in Miami. According to data from the Miami Association of Realtors, the number of new homes sold in the area fell by 5% in 2024, compared to the previous year. Many builders in the area are citing the tariffs as a contributing factor. “It’s becoming increasingly difficult to keep construction costs under control,” said Carlos Garcia, a builder in Miami. “The tariffs are directly affecting everything from concrete to roofing materials. As costs rise, the potential for profit becomes slimmer, and developers are less inclined to start new projects.”
The impact of the tariffs extends beyond just residential homes. Commercial projects are also feeling the pinch. In cities like Orlando, which has seen significant growth in tourism and business development, the rising costs of construction materials are already slowing the development of hotels, office buildings, and retail spaces. As a result, the area’s commercial real estate sector has seen a slowdown in new investments, hindering Florida’s economic growth.