Home builders in New Orleans are bracing for a fresh wave of cost increases following former President Donald Trump’s newly imposed tariffs on foreign goods. The tariffs, which target a wide range of building materials and home appliances, are expected to increase the cost of building a new home by an average of $9,200 nationwide, according to the National Association of Home Builders (NAHB).
For a city like New Orleans—where construction already faces challenges from flooding, permitting delays, and insurance volatility—the added costs could ripple across the housing market, from new builds to resale home prices.
Tariffs on Materials and Appliances Hit Builders Hard
Although Canadian lumber is exempt from Trump’s most recent round of tariffs, it remains subject to a 14.5% duty stemming from earlier trade disputes. Meanwhile, key building materials and appliances from other countries are now being taxed at sharply higher rates:
• Chinese materials: Tariffs as high as 54%
• Malaysian imports: Up to 24%
• Indonesian goods: Up to 32%
These tariffs apply to everything from plumbing fixtures and electrical wiring to HVAC systems, drywall, flooring, and kitchen appliances—drastically increasing the cost of construction for both developers and independent builders.
According to the New York Post, the cost hikes will likely be passed directly to buyers, especially in high-demand markets like New Orleans where builders already operate on thin margins.
New Home Prices Will Rise — But That’s Not the Only Concern
With construction costs rising, builders may delay or cancel projects, creating a ripple effect in the broader market. When fewer new homes are built, inventory shrinks, and that scarcity can drive up existing home prices—especially in cities like New Orleans where housing supply already struggles to keep up with demand.
This trend is backed by a recent Barron’s report noting that rising replacement costs (from tariffs and inflation) are also expected to push homeowners insurance premiums even higher—creating yet another cost burden for buyers and existing homeowners alike.
Could Lower Mortgage Rates Offset the Pain?
There is one small silver lining: mortgage rates have dipped slightly in response to broader economic uncertainty driven by the tariffs. According to Axios, the average 30-year fixed mortgage rate has fallen from 6.75% to 6.55%, which may ease monthly costs for some buyers.
However, most experts agree this rate drop isn’t enough to cancel out the effects of higher home prices and building costs. In short: a lower interest rate on a more expensive home is still a more expensive home.
What This Means for New Orleans
For New Orleans, the impact of Trump’s tariffs could be particularly acute. With insurance already sky-high, labor shortages still lingering, and permitting processes that delay new builds, this added financial pressure makes it even harder for affordable housing projects to move forward.
Builders may shift focus to higher-end projects, leaving fewer options for middle-income and first-time buyers. And existing homeowners may benefit from rising property values—but only on paper. For those needing repairs, renovations, or replacement appliances, costs are going up across the board.
A Housing Market on the Edge
Whether you’re a builder, buyer, or renter in New Orleans, the effects of Trump’s tariffs will likely be felt in the coming months. With construction costs rising, insurance premiums increasing, and inventory potentially shrinking, affordability will continue to erode—especially for those already struggling to break into the market.
The city’s long-term housing resilience will depend on smart local policy, state-level investment, and a push to shield affordable housing efforts from broader economic shocks.
