How A Trade War Will Affect Real Estate

Performance Property Real Estate Question

Q: How will a trade war affect real estate prices? Caleb, Short Hills, NJ

A: Higher home construction costs contribute to rising home prices. Right now it costs significantly more money to build a new home than it did just a few years ago for a variety of reasons including the higher cost of land, a skilled labor shortage and the fact that there is a huge mismatch between where people want to live and where it’s easiest to build. Increased construction costs will exacerbate the housing shortage we are currently experiencing in many local real estate markets in the US. The construction industry accounted for 40% of all U.S. steel demand in 2017, so new steel tariffs and a trade war will further increase the cost of construction which in turn will likely increase real estate prices and the cost of home ownership.

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