Housing market uncertainty is growing as shifting tariffs and volatile interest rates complicate pricing for both builders and buyers. The latest changes in U.S. trade policy have sparked new concerns over construction material costs at a time when affordability is already strained.

President Trump announced a steep increase in tariffs on imports from China, raising rates to 145%, while reducing tariffs on goods from other nations to a universal 10%. Although key building materials such as lumber, copper, steel, and aluminum are currently excluded, the possibility of future policy changes continues to create instability across the construction sector.

This environment makes it difficult for developers to plan ahead, particularly in communities like El Monte, Baldwin Park, and South El Monte, where housing production depends on consistent cost forecasts. Any disruption to supply chains or increases in imported material costs may delay projects or reduce their scope.

Material Costs and Regional Impact

The potential for rising costs is especially concerning in cities pursuing affordable housing development. Sudden price hikes in materials—even for exempt categories—can result from supplier adjustments to broader trade conditions. These increases could impact budgets for both private and publicly funded housing, potentially stalling progress on essential projects.

In areas such as Irwindale and Rosemead, where land and labor costs are already elevated, an increase in material expenses adds another layer of pressure. These effects ripple out to renters and prospective homebuyers, who may face higher prices as developers pass on the added costs.

Housing Market Uncertainty Contributes to Instability

Volatility in mortgage rates is amplifying the uncertainty. Last week, the 10-year Treasury yield recorded its largest week-over-week increase since 1981, pushing the average 30-year fixed mortgage rate above 7%. Rates began trending downward early this week, but fluctuations remain likely as recession fears and global trade dynamics influence investor behavior.

These rate shifts reduce purchasing power and can lead to unpredictable changes in home prices. For buyers in the Mid Valley area, the cost of borrowing has become a key barrier, with rate instability complicating affordability and long-term financial planning.

Uncertain Outlook for Homebuyers and Builders

With both trade and financial markets in flux, the regional housing market faces an uncertain path forward. Builders in the San Gabriel Valley must navigate price unpredictability while maintaining production targets. For homebuyers, rate volatility and potential cost increases raise concerns about timing and long-term value.

The current combination of external pressures makes housing development and purchasing more complex. While short-term conditions may change, the broader environment points to continued housing market uncertainty heading into the summer months.