| As reported by The Real Deal — National Real Estate News March 16, 2025 |
| 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 floor plans 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. |