Trump Tariffs Drive Up Housing Costs

President Donald Trump’s second-term trade policies are shaking up the market in ways that landlords, developers and homebuyers can’t afford to ignore. From surging rents to stalled construction projects, the impact of tariffs is rippling through the industry.

The uncertainty surrounding Trump’s tariffs and economic policies is pushing potential homebuyers to the sidelines, and that hesitation is driving rental prices to record highs.

In New York City, Manhattan’s median rent hit a fresh high of $4,500 in February — its highest level since 2023. Brooklyn and Queens are feeling the pressure too, with Brooklyn rents averaging over $4,000 and Northwest Queens surpassing $3,400.

Chicago isn’t far behind. Downtown apartment rents just broke the $3,000 threshold for the first time ever, and with supply cratering due to high construction costs, developers are holding back — meaning rents are only expected to spike further in 2025.

Tenants are afraid to take the plunge into homeownership amid fluctuating mortgage rates and economic instability. The result is lower vacancy rates, more bidding wars and landlords with the upper hand. With summer around the corner, expect even higher rents in the months ahead.

While mortgage rates have dipped since Trump’s return to the White House, experts say the unpredictability surrounding his tariffs is outweighing any potential savings — causing some renters who once considered buying to think again.

The outlook for new homes isn’t any rosier, and homebuilders are scrambling.

Trump’s tariffs on steel, aluminum and lumber imports are driving up costs, forcing builders to get creative. Some are stockpiling materials, gambling that today’s prices are better than what’s to come. Others are shrinking floorplans or pivoting to modular construction. The National Association of Home Builders estimates these tariffs could add $7,500 to $10,000 to the cost of a new home.

And in places like California, where developers are already dealing with fire recovery costs, the added expense could mean the difference between rebuilding and walking away from projects altogether.

Politicians and pundits are pointing fingers at Commerce Secretary Howard Lutnick as the architect of Trump’s tariff strategy. While Trump’s unpredictability has long been a hallmark of his economic policy, the former Cantor Fitzgerald head’s mixed messaging is keeping investors and industry players on edge.

In Texas, where industrial development has been booming, big players like Ross Perot Jr. are considering baking “tariff clauses” into contracts to prepare for rising costs. Meanwhile, Citadel founder Ken Griffin isn’t mincing words — calling Trump’s trade policies a “huge mistake” that could cripple the economy.

Huge mistake or not, the uncertainty and chaos surrounding Trump’s tariffs is certainly making it difficult to stay ahead of the curve.

Outside of Trump’s tariffs, there was plenty of news this week. Mark Nussbaum is in the spotlight after allegations of missing funds, HomeServices of America denied reports that its subsidiaries are being acquired by Compass, and RXR and SL Green nabbed a modification on a $940 million loan.

How Mark Nussbaum went from transactional lawyer to escrow-funded dealmaker

High-profile real estate attorney Mark Nussbaum is at the center of a growing scandal after multiple lawsuits alleged millions of dollars went missing from his escrow accounts. Nussbaum’s web of connections includes real estate investors already entangled in federal mortgage fraud investigations, including indicted investors Moshe Silber and Boruch Drillman.

HomeServices CEO denies Compass deal talks

The head of Berkshire Hathaway HomeServices called bull on a Wall Street Journal report claiming Compass was in “advanced talks” to acquire the firm. The move would have been a major step in what has become a 12-month period of rapid consolidation for Compass, the nation’s largest brokerage by deal volume.

RXR, SL Green save $940M Worldwide Plaza loan from special servicing

RXR and SL Green have secured a loan modification for the $940 million mortgage on Worldwide Plaza after the departure of a major tenant sent the property into distress. The 825 Eighth Avenue office tower landed in special servicing last year after law firm Cravath, Swaine & Moore vacated, wiping out nearly half of the building’s rent roll.

Elliman closes bumpy 2024 with $76M loss

Douglas Elliman ended 2024 with a $76 million loss, up from $43 million in 2023, as it faced leadership changes, lawsuits and scrutiny. Despite the losses, the firm grew revenue to nearly $1 billion, while cutting expenses by $20 million as part of an ongoing cost-reduction strategy.

Florida bills aim to boost HOA and condo association oversight, ease structural integrity requirements

The Florida Legislature is considering bills that target two of the thorniest issues at condo and homeowners associations: alleged fraud and structural requirements. To combat fraud, this legislative session’s bills seek to introduce an investigations pilot program and expand the powers of state oversight agencies. Other bills deal with structural safety requirements imposed on condo associations following the deadly Champlain Towers South collapse in Surfside in 2021.

Benedict Canyon site once set for Bulgari hotel hits market for $175M

A megalisting priced at $175 million has hit the market in what’s been a drawn-out saga for a piece of Benedict Canyon once slated for a Bulgari-branded hotel. The 15-parcel listing located in Beverly Hills Post Office now ranks as the third-priciest property on the market within Los Angeles County.

“Land speculation becomes problematic”: Chicago cracks down on more debtors
The city of Chicago is going after its most problematic landowners. Goldmine Investments and QCD Financial follow a pattern of owners being pursued by a city task force that’s designed to pin down Chicago’s most indebted landowners. The two firms face millions in fines after buying up distressed properties, often vacant lots in disadvantaged neighborhoods, and allegedly letting them decay.