Two of President Donald Trump’s policies — tariffs on key building materials and aggressive deportations — are emerging as major culprits behind the worsening housing crisis in the country, Axios reported Wednesday.
New construction has slowed and costs have risen across the United States, per the report.
According to fresh data from the Commerce Department highlighted in the report, home construction in May dropped to an annualized rate of 1.3 million — the weakest pace in five years and nearly 10% lower than the month before.
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Building permits also hit a five-year low, falling nearly 3% from April for single-family homes.
This month, the National Association of Home Builders reported its lowest confidence reading since 2022. Only twice since 2012 has sentiment among builders been this low, the report noted.
Driving much of the downturn are supply-side constraints linked to policy decisions made by the Trump administration.
Tariffs on steel and aluminum have doubled to 50%, except for materials imported from the United Kingdom, while higher tariffs on lumber and other wood products are being considered.
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At the same time, deportation policies are shrinking the construction labor force, further straining the industry. “The industry is heavily reliant on immigrant workers, who are being targeted for deportations by the Trump administration,” the report said.
According to the report, homebuilding giant Lennar reported weaker-than-expected earnings this week.
“New construction has slowed as builders have pulled back on production,” Lennar co-CEO Stuart Miller said, per Axios.
Miller added, “labor and material costs — lumber is a particular headache — are generally increasing.”
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Although certain markets are grappling with excess housing supply, many areas are facing shortages due to stalled construction — further pushing up home prices and worsening affordability.
