What Trump’s New Tariffs Could Mean for Home Prices and Mortgage Rates in Western WI and the Twin Cities

On what he called “Liberation Day,” former President Donald Trump made headlines by announcing sweeping new tariffs on imported goods—moves that could have far-reaching effects on the U.S. economy. But if you’re thinking of buying or selling a home in Western Wisconsin or the Twin Cities, you’re probably wondering: What does this mean for me?

Let’s break it down.

First, What Are These Tariffs?

The new policy includes a 10% minimum tariff on most foreign goods and a 25% tariff on all imported vehicles. Countries like Canada and Mexico—our neighbors and top trade partners—were initially exempt but will soon face that same 10% rate.

While the goal is to protect American jobs and boost domestic manufacturing, tariffs act as taxes on imported goods, and those costs are almost always passed along to the consumer.

How This Impacts Home Prices Locally

If you're planning to build or buy a newly built home, here’s where this hits home—literally.

Construction Costs Are Likely to Rise

Roughly 10% of the materials used in U.S. home construction are imported. Lumber from Canada and drywall materials from Mexico are major components of new builds here in Western Wisconsin and the greater Twin Cities metro. With tariffs on these goods, builders are looking at increased material costs of $7,500 to $10,000 per home, according to the National Association of Home Builders (NAHB).

That extra cost? It’ll likely be baked into the price of new homes.

And in a region already grappling with tight housing inventory and high demand, any increase in building costs makes it harder for builders to meet the needs of first-time buyers and middle-income families—those most affected by rising prices.

Resale Home Prices May Be Affected Too

While new construction is where we see the direct impact, higher new-home prices can also pull up resale home values. If fewer affordable new homes are being built, demand increases for existing homes, especially in desirable neighborhoods.

So if you’re a homeowner thinking about selling, this may actually work in your favor—at least in the short term. Rising construction costs could mean less competition from new builds and greater urgency from buyers looking to get in before prices climb further.

What About Mortgage Rates?

Tariffs don’t just impact goods—they can also impact inflation. And when inflation rises, so do mortgage rates.

Why That Matters Now

Mortgage rates have already been hovering above 6.6%, largely due to ongoing inflation pressures. If tariffs continue to push prices higher, the Federal Reserve may delay or reduce future interest rate cuts, keeping borrowing costs elevated.

That’s especially important for buyers hoping for a drop in mortgage rates. Former President Trump has claimed he’ll bring rates down to 3%, but the reality is, presidents have little direct control over mortgage rates. If tariffs fuel inflation, rates may stay high—or even inch higher.

On the flip side, if these economic moves lead to a slowdown or recession, we could actually see rates drop. But that's a big “if” and not something to bank on when planning your move.

What Buyers & Sellers in Western WI and the Twin Cities Should Do Now

Whether you're in Hudson, Stillwater, River Falls, Woodbury, or Minneapolis-St. Paul, here’s what this means for you:

📍 If You’re a Buyer:

• Act sooner rather than later. Waiting for prices or rates to drop could backfire if both go up instead.

• Consider resale homes, where price impacts from tariffs are less direct.

• Stay educated on what’s happening with mortgage rates and builder incentives—there are still ways to buy smart.

📍 If You’re a Seller:

• This could be your moment. Less competition from new construction means your home could stand out more.

• Price strategically. Homes priced correctly in this market are still moving quickly.

• Highlight value—mention updates or energy-efficient upgrades to show why your home is worth it, especially with rising costs elsewhere.

Bottom Line

The real estate market in Western Wisconsin and the Twin Cities is always shifting, and big-picture economic moves—like these new tariffs—can create ripple effects close to home. Whether you're buying your first place or selling your longtime property, staying informed is key to making the best decision.

And remember, no matter the headlines, local expertise always wins. If you want to know what this means for your home goals, I’m here to help.

Let’s talk.

Read the full article: https://www.realtor.com/news/real-estate-news/trump-tariff-liberation-day-housing-costs/