The United States’ recent tariffs on imported goods are reverberating far beyond factories and farms – they’re also hitting the housing sector. Tariffs on materials like steel, aluminum, and lumber (as well as broader consumer goods) function as import taxes that raise costs for businesses (nahb.org). Companies often pass those extra costs on to consumers, which in real estate means more expensive construction and higher housing prices. Renters might assume trade policy has little to do with their monthly rent, but that’s unfortunately not the case. In reality, these tariffs are driving up rent prices in major cities by inflating building costs and slowing the supply of new housing. Below, we explore how and why this is happening – and what it means for renters and the U.S. housing market going forward.

Tariffs Raise Construction Costs and Housing Prices

Tariffs implemented over the past few years – and new ones still on the horizon – have sharply increased the cost of construction materials. In early 2025, the federal government reinstated and expanded import duties on critical building inputs such as steel, aluminum, and lumber (blog.aptamigo.com). For example, imported steel and aluminum now face a 25%–50% tariff, and tariffs on Canadian softwood lumber (the U.S.’s main external lumber source) jumped to 14.5%, with plans to more than double to 34.5% later in 2025 (blog.aptamigo.com). These tariffs were justified as protecting domestic industries, but they directly translate into higher prices for construction essentials like structural steel beams, wiring, appliances, and wood framing.

According to the National Association of Home Builders (NAHB), such tariffs on building materials “raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices” (axios.com). In fact, NAHB estimates that the recent tariff actions add about $10,900 to the cost of constructing a typical new home (nahb.org). Every extra dollar in development cost tends to get baked into the final price of a house or apartment unit, meaning would-be buyers or renters ultimately foot the bill. Home builders facing these rising material costs often have no choice but to raise prices or rents to make projects financially viable.

Higher construction costs also discourage new development. Industry groups warn that tariffs are prompting some project owners and developers to delay or cancel building plans because the numbers no longer work (suretybondprofessionals.com). The Associated General Contractors of America, for instance, cautioned in May 2025 that the steel and aluminum tariffs would drive up costs and cause many infrastructure and housing projects to be put on hold (suretybondprofessionals.com). This chilling effect comes at a time when the U.S. is already struggling with a housing shortage. Fewer new projects breaking ground means less new housing supply in the pipeline – a key factor that puts upward pressure on prices for existing homes and rentals. In short, tariffs act like a tax on homebuilding: they make construction more expensive and slow down the supply of new housing, which ultimately pushes prices higher for consumers (nahb.org).

Fewer New Apartments Mean Higher Rents

The impact of tariffs is being felt acutely in the rental market of major cities. When the cost to build new apartment buildings rises, developers may scale back or abandon multifamily housing projects. With fewer new apartments getting built, competition for the limited existing rentals intensifies – and rents climb higher. As one housing expert noted, tariffs on materials for multifamily construction mean “rising costs could discourage builders from breaking ground” on new apartments, and “with the added building costs for multifamily housing units come higher rental prices” (housebeautiful.com). In other words, renters end up paying more because there aren’t enough new units to meet demand.

This dynamic is already playing out. By 2022, many cities were seeing record rent growth due to tight housing supply – rent increases hit double-digit percentages in 2022 in several metropolitan areas (blog.aptamigo.com). A construction boom in 2021–2023 had started to add more apartments and ease the crunch, but the new wave of tariffs threatens to undo that relief. A recent analysis by Realtor.com warned that the 25% tariffs on imported steel and aluminum imposed in 2025 could “disrupt the supply of multifamily housing” and potentially reverse the downward trend in rents, “driving rents higher”(realtor.com). Markets that saw a surge of new apartment construction planned are expected to be hit hardest, since many of those projects may now be delayed or scaled back due to cost spikes (realtor.com).

For instance, cities like Milwaukee, WI; Oklahoma City, OK; and Memphis, TN experienced some of the fastest growth in multifamily building permits in 2024 – far above their recent averages (realtor.com). Milwaukee approved over 100% more multifamily units in 2024 than its 2019–2023 norm (realtor.com). These locales were poised for an apartment boom, but tariffs that jack up steel and lumber prices threaten to throw a wrench in those plans. If developers in these markets pull back, renters there could face a double whammy: the anticipated new units may not materialize, and the existing apartments become even more expensive due to the shortfall. Even in larger, traditionally high-demand cities, the pattern holds. In Chicago, for example, a wave of new apartment projects peaked in 2023 but then started declining, and tariff-induced cost hikes are exacerbating that slowdown (blog.aptamigo.com). With fewer new buildings coming onto the market in Chicago and elsewhere, renters find vacancy rates staying low and landlords gaining leverage to keep raising rents.

Crucially, the increased costs from tariffs don’t stay on paper – they filter down to what people pay each month. Analysts emphasize that developers facing higher expenses will attempt to pass those costs on. “Ultimately, these added costs are likely to be passed on to renters, pushing rental prices higher,” as Realtor.com’s chief economist explained (realtor.com). Renters might not see a line item for “tariff surcharge” on their lease, but they bear the burden through inflated rent prices caused in part by trade policy. It’s an indirect and often hidden effect. Tariffs on Canadian lumber or Chinese steel might sound like abstract economic policy, but they translate into real dollars and cents for a young professional renting a studio in Denver or a family renting a suburban house in Dallas.

Impact on Renters and Housing Affordability

For renters, these tariff-driven rent increases compound an already challenging affordability crisis. Even before the latest tariffs, housing costs in many big cities were soaring beyond reach for middle-class households. Years of under-building and pandemic disruptions left demand far outstripping supply, and rents in 2022–2023 skyrocketed in many urban areas (blog.aptamigo.com). Now tariffs are “pouring fuel on the fire” by further constraining supply and upping costs.

Many Americans have no choice but to remain renters because buying a home is out of reach – and tariffs are making that gap wider. Nearly 75% of U.S. households cannot afford a median-priced new home at current price and interest rate levels (blog.aptamigo.com). Each additional price increase (for example, from higher construction costs) prices out even more families from homeownership. This keeps more people in the rental market, adding to the demand for apartments. At the same time, tariffs are slowing the addition of new units. It’s a recipe for continued high rent burdens. As one NAHB analysis noted, each $1,000 increase in a home’s price (from any cause) excludes over 115,000 households nationwide from being able to purchase (blog.aptamigo.com). Tariffs have effectively added ten times that amount to construction costs, illustrating how significantly they can erode affordability.

Broader economic effects of the tariffs could eventually take some pressure off rents, but not in a painless way. If the import taxes contribute to overall inflation, the Federal Reserve may keep interest rates higher for longer to tame it (blog.aptamigo.com). Higher interest rates make mortgages more expensive, which ironically forces more would-be buyers to keep renting – propping up rental demand. On the other hand, if tariffs and trade uncertainty slow down the economy enough, we could see job losses in certain industries or even a recession. A serious economic downturn would likely cool rent growth (as people delay household formation or double up to save money), but that’s hardly a desirable solution. In essence, the only scenarios that might bring rent relief in tariff-hit cities involve broader economic pain that policymakers are keen to avoid (blog.aptamigo.com). For now, the most likely outlook is that renters will continue to face upward pressure on rents so long as tariffs are constraining housing development and the job market remains relatively strong.

It’s worth noting that the intended long-term goal of tariffs is to boost domestic production of materials like steel and lumber, which in theory could eventually lower costs. However, any ramp-up in U.S. manufacturing capacity will take years. The White House itself acknowledged that significant increases in domestic lumber and metals output are unlikely before 2026 or 2027 (suretybondprofessionals.com). In the interim, builders and consumers are stuck paying more. Some builders are finding creative ways to adapt – from stockpiling materials in advance to redesigning projects to use less steel – but there’s no silver bullet to erase a 25%+ cost increase. Ultimately, renters and homebuyers are absorbing those costs. The tariffs have essentially added another obstacle for anyone seeking affordable housing in major cities.

Conclusion

In summary, tariffs on imports have become a hidden factor driving up rents in cities across the U.S. By making it more expensive to construct homes and apartments, these trade policies shrink the supply of available housing and feed into higher prices for both buyers and renters. For residents of major metros like Chicago, Atlanta, or Los Angeles, this means the rent hikes of recent years could persist as long as tariffs and supply shortages do. While there may be hope that domestic production adjustments or economic shifts will eventually stabilize costs, renters today are caught in the middle – paying the price for global trade maneuvers in the form of rising rent checks.

Navigating such an unforgiving rental market is challenging, but renters don’t have to go it alone. Tools and services are available to help find better deals or hidden gems despite the headwinds. For example, leveraging a free apartment-finding service like AptAmigo can connect renters with expert local knowledge and up-to-date listings to locate affordable options even as the broader market gets pricier. In an environment where policies on the other side of the world can make your next lease more expensive, being an informed and proactive renter is more important than ever.

Works Cited

• Axios. “Trump Lumber Tariff Threat Is Latest Headache for Homebuilders.” Axios Business, March 1, 2025axios.com.
  
• Dietz, Robert. “Cost and Tariff Uncertainty Weighs on Markets.” Eye on the Economy, National Association of Home Builders, March 16, 2025blog.aptamigo.com.
  
• Investopedia. “Tariffs Could Mean Higher Prices for Your New Home—Here’s How.” Investopedia, May 3, 2025blog.aptamigo.com.
  
• National Association of Home Builders (NAHB). “How Tariffs Impact the Home Building Industry.” NAHB Advocacy Issue Brief, April 2025nahb.org.
  
• National Association of Home Builders (NAHB). “Elevated Interest Rates Cause Housing Starts to Retreat at the Start of 2025.” Press Release, Feb. 19, 2025suretybondprofessionals.com.
  
• Realtor.com Economic Research. “March 2025 Rental Report: Rents Continue to Fall, but Tariffs on Imported Steel and Aluminum Could Exert Upward Pressure on Prices.” By Jiayi Xu and Danielle Hale, Apr. 16, 2025realtor.com.
  
• Shouse, Meghan. “Tariffs Will Hit THESE 9 Rental Markets the Hardest, According to Experts.” House Beautiful, May 13, 2025housebeautiful.com.
  
• Stahr, Alyssa. “Is It Expensive to Live in Chicago?” AptAmigo Real Estate Blog, June 13, 2024blog.aptamigo.com.
  
• Surety Bond Professionals. “Construction Sector Impacts of Steel & Aluminum Tariffs.” SuretyBondProfessionals.com Blog, May 2025suretybondprofessionals.com.
  
• Xu, Jiayi, and Danielle Hale. “Markets With Fast-Growing Multifamily Permits Face the Greatest Impact.” Realtor.com Rental Report, Apr. 16, 2025realtor.com.
  

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