A new report warns the potential impact of tariffs on construction costs could trigger a decline in homebuilding and homeownership across Greater Philadelphia. Proposed tariffs could decrease the number of homes built in the region by nearly 1,600 units per year and drop the homeownership rate below 50%, according to a report from Kevin Gillen, senior research fellow at Drexel University's Lindy Institute for Urban Innovation. Gillen presented his findings to Realtors in a June 26 webinar for the Suburban Realtors Alliance. View a recording here and the slide deck here. Where rates will ultimately land is still uncertain, as President Trump continues to change the growing list of tariffs. Tariffs most likely to impact homebuilding include a 25% tax on steel and aluminum that was doubled in early June to 50%, along with a likely increase in tariffs on Canadian lumber, which currently sits at 14.5%. These expenses on imported materials would drive up the cost of building a new home in Greater Philadelphia by $20,000, or about 4%, Gillen's report finds. The higher costs may render many residential projects unprofitable, leading to less development. Homebuilders could also pass increased costs along to homebuyers, further exacerbating the issue of affordability in the region. "I would characterize my outlook as cautiously pessimistic, not in panic mode," Gillen said.
Source: Philadelphia Business Journal; 7/9/2025