Tariffs Pressure U.S. Housing Market as Construction Costs Continue to Climb

Construction expenses rose for the third consecutive month in March, according to an analysis by Associated Builders and Contractors (ABC) using the latest data from the U.S. Bureau of Labor Statistics. The increases reflect the early consequences of new tariffs imposed by the Trump administration on several of America’s major trading partners.

Prices for residential construction inputs climbed 0.5 percent from February, while nonresidential inputs increased 0.6 percent. Compared with the same period last year, both categories were up 0.8 percent, underscoring ongoing inflationary pressures across the sector.

Why It Matters

The United States continues to face a deepening housing affordability crisis, driven by a historic shortage of homes after years of underbuilding following the Great Recession.

Although construction activity has picked up nationwide to meet demand, rising material costs—intensified by new tariffs—are making it harder for developers to deliver new housing. The increase doesn’t just affect raw materials like steel and lumber; even the price of essential jobsite gear such as construction uniforms and safety apparel has risen, putting added strain on contractors and workers alike.

What to Know

Since the start of the COVID-19 pandemic, construction costs have soared, worsening supply shortages and squeezing project budgets.

Between February 2020 and March 2025, ABC data shows that total construction input prices surged 41.6 percent. The sharpest gains came from copper wire and cable (up 51.6 percent), fabricated structural metal products (up 57.6 percent), steel mill products (up 53.9 percent), and electrical switchgear and controls (up 52.3 percent).

Recent increases suggest that tariffs are adding further pressure. From February to March, natural gas prices jumped 10.4 percent, steel mill products rose 7.1 percent, and both iron and steel, as well as copper wire and cable, climbed 5.5 percent. Year over year, natural gas prices skyrocketed 147.6 percent, followed by copper wire and cable (up 13.4 percent), softwood lumber (up 12.6 percent), and aggregates like sand and gravel (up 8.3 percent).

“Tariffs have directly elevated material costs by increasing the price of imported goods,” said ABC Chief Economist Anirban Basu in an interview with Newsweek. “This includes not only raw materials but also the equipment and apparel used on construction sites.” Basu added that a rush to order materials before tariffs took effect temporarily pushed demand and prices even higher.

What Experts Are Saying

Basu noted that “construction input prices rose sharply for the third straight month in March, translating to a 9.7 percent annualized rate for the first quarter of 2025.”

He added, “The effects of tariffs are evident in the price increases for iron, steel, and copper products—all up more than 5 percent in a single month. While contractors remain busy for now, sustained cost escalation and uncertainty could delay or cancel projects.”

Ken Simonson, chief economist for the Associated General Contractors of America (AGC), told Construction Dive: “Lumber and metals costs spiked in March, and contractors are receiving constant price hike notifications. Frequent tariff changes could drive prices for essential construction goods and supplies even higher.”

What Comes Next

Although former President Trump pledged to make housing more affordable, analysts warn that some of his trade policies could have the opposite effect by raising construction and labor-related costs.

“If tariffs remain in place, materials prices are likely to keep increasing,” Basu told Newsweek. “Only a significant economic slowdown could offset this trend by reducing demand.”

With tariffs of 10 percent on softwood lumber and 25 percent on steel, builders face uncertainty not only about materials but also about the cost of construction site essentials, from heavy equipment to safety uniforms.

In March, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index dropped to 39 from 42 in February—its lowest level in seven months—signaling weakening builder confidence.

“Multifamily permitting has slowed sharply over the past two years due to high borrowing costs cutting into profitability,” Basu said. “Further cost increases, including those linked to imported metals and workwear, could worsen this trend amid persistent economic uncertainty.”

The Role of Workwear in a High-Cost Construction Market

As expenses continue to rise, construction companies are paying closer attention to value and durability in every area of operations—including worker apparel. Investing in dependable Yurinox construction wear helps maintain safety, comfort, and professionalism on the job site while controlling long-term costs.

Yurinox Workwear makes it easy for builders and contractors to buy professional grade uniforms online in the United States through a trusted, quality-driven platform. As a leading name in industrial work apparel, Yurinox offers a range of durable, high-visibility, and protective gear designed to meet industry standards and withstand tough site conditions.