By New England Landmark Realty LTD

Let’s be clear: Vermont’s housing market doesn’t need more obstacles. We’re already dealing with high mortgage rates, tight inventory, and affordability concerns. Now, Washington wants to throw tariffs into the mix, a policy move that will only make buying and building homes more expensive.

The Trump administration’s 25% tariffs on Canadian and Mexican imports will hammer the construction industry, drive up costs, and stall homebuilding at the worst possible time. Vermont homebuyers, already stretched thin by high borrowing costs, will face an even steeper climb. For instance, first-time homebuyers will find it increasingly difficult to enter the market, and those looking to upgrade or downsize will face higher costs and limited options.

This is not what a fragile housing market needs.

Tariffs = Higher Costs, Slower Construction, Fewer Homes

The National Association of Home Builders (NAHB) isn’t mincing words. They’ve warned the administration that new tariffs will hurt homebuyers by driving up material costs. It’s not speculation—it’s history.

🔺 In 2018, tariffs on Canadian lumber caused prices to jump nearly 80%, adding an estimated $9,000 to the cost of building a single-family home. This means that a home that would have cost $ 250,000 to build in 2017, now costs $ 259,000 in 2018 due to the tariffs.

🔺 Since 2021, residential construction costs have risen 30% due to supply chain disruptions, labor shortages, and inflation.

🔺 Roughly 25% of U.S. building materials come from Canada and Mexico, and raising prices on these imports will send costs soaring.

Vermont desperately needs more housing. The state’s short supply of homes has kept prices high, shutting out many local buyers. Builders are already struggling to keep up. Higher material costs mean fewer homes get built, which means higher prices for the ones that do.

This policy move isn’t just bad—it’s reckless.

Housing Affordability Is Already in Crisis—Tariffs Will Make It Worse

The housing market doesn’t operate in a vacuum. Interest rates, supply chain issues, and government policies all play a role. Vermont’s market is strained, and tariffs will only make homeownership more expensive.

📉 Mortgage rates remain high—around 7%, compared to 3-4% just a few years ago.

🏠 Housing inventory is still low despite a modest increase in listings over the past year.

💰 New construction is Vermont’s best chance at adding affordable housing, but rising material costs will slow it down.

Every additional dollar in home costs, whether from higher mortgage rates or increased construction expenses, shrinks the pool of buyers who can afford to enter the market. In a state where housing affordability is challenging, these tariffs worsen a terrible situation.

Questionable Economic Strategy in a Fragile Market

Tariffs are being pitched as a tough-on-trade strategy, but they function as a hidden tax on American consumers. The Tax Foundation estimates that these tariffs will:

💸 Raise taxes on U.S. households by $830 per year

📉 Shrink GDP by 0.4%

🛠️ Cut 344,000 jobs

These aren’t abstract numbers—they represent real economic pain. Vermont’s economy, largely driven by small businesses, tourism, and local industry, isn’t built to absorb unnecessary price hikes. And let’s not forget that Canada and Mexico will retaliate—meaning American exports will take a hit, too.

The Trump administration’s economic advisors acknowledge this is not a long-term trade strategy but a negotiation tactic. In other words, Vermont homebuyers are collateral damage in a political game.

What Should Vermont Buyers, Sellers, and Builders Do Now?

Vermont’s real estate market is about to get even more unpredictable. Timing and strategy will be critical if you’re thinking about buying, selling, or building.

🏡 BUYERS: Lock in mortgage rates when they dip. Due to rising material costs, be prepared for potential price hikes on new construction homes.

📈 SELLERS: Low inventory still favors sellers, but watch market conditions closely—higher costs could dampen buyer demand.

🔨 BUILDERS & INVESTORS: If tariffs go into full effect, expect supply chain disruptions and rising costs. Builders should anticipate delays and budget for price swings.

A temporary one-month pause on tariffs with Canada and Mexico is in place for now. But that’s exactly what it sounds like—temporary.

The Bottom Line: Vermont Deserves Better Policy

Vermont’s real estate market doesn’t need more uncertainty but relief. The combination of high mortgage rates, limited inventory, and rising material costs is a recipe for slower homebuilding, fewer sales, and even higher prices.

Tariffs may score political points, but they come at a direct cost to homebuyers and builders. This misguided strategy ignores the reality of an already struggling housing market.

If you’re navigating this volatile landscape, don’t go it alone. For expert guidance, contact Tony Walton and the team at NELandmark.com or call 802-253-4711. Vermont real estate is still full of opportunity—you just need the right strategy to seize it