Trump Administration places new tariffs on Canada, Mexico and China, including building supplies

The Trump Administration on Saturday announced tariffs on $1.4 trillion in imports, including a 25% tariff on building materials from Canada and Mexico, and a 10% tariff on a range of components from China that are essential to housing, including transformers, appliances, and wiring. The National Association of Home Builders (NAHB) wrote to the President on Friday, requesting an exemption for residential building supplies. Following the announcement NAHB Chairman Carl Harris issued a statement criticizing the move, noting that the President on his first day in office issued an executive order directing departments and agencies to deliver emergency price relief by pursuing actions to lower the cost of housing and increase housing supply.

On Saturday, Harris said the president’s “move to raise tariffs by 25% on Canadian and Mexican goods will have the opposite effect. More than 70% of the imports of two essential materials that home builders rely on—softwood lumber and gypsum (used for drywall)—come from Canada and Mexico, respectively. Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices. NAHB urges the administration to reconsider this action on tariffs and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production.”

Funding freeze sparks confusion, concern for housing programs 

Following the Office of Management and Budget’s memo ordering a temporary freeze on all federal funding assistance, numerous key stakeholders who rely on these funds raised concerns about the potential impact on their operations and their constituents.

“Even a short pause in funding could cause significant harm to low-income families and their communities,” said National Low Income Housing Coalition (NLIHC) Interim President and CEO Renee Willis. “The longer the freeze continues, the greater the risk that low-income households receiving federal rental assistance could face eviction, and in the worst cases, homelessness, homeless shelters may be forced to close their doors, and nonprofit organizations may have to lay off staff.” 

The Mortgage Bankers Association issued a statement asking for clarity on the memo, stating “Americans are going to the closing table tomorrow and deserve to know that their loan will close on their home purchase. Without this clear assurance that the federal government will insure new loans or pay claims under these programs, there will be severe harm to borrowers and disruption to the mortgage market.”    

In response to the memo being rescinded, the National Alliance to End Homelessness stated, “While this reprieve is certainly good news for the moment, we must remain vigilant and focused. There are already several Executive Orders issued that threaten real harm to people experiencing homelessness and our efforts to bring everyone home. Please continue to apply pressure to Members of Congress. We need them to support the programs and people who serve those experiencing homelessness across the nation."

Scott Bessent confirmed as Treasury Secretary 

Scott Bessent was sworn in as the 79^th Secretary of the U.S. Department of the Treasury. He was confirmed in a 68-to-29 vote, with 16 Democrats voting with Republicans in favor. Prior to his confirmation, Bessent worked as an executive for a number of major management investment firms and hedge funds. He has vocally pushed for a renewal of the Tax Cuts and Jobs Act. During his confirmation hearing, Bessent referenced the shortage of housing supply as a major concern. In written responses to the Senate Banking Committee's questions for the record, he also expressed a desire to end the government conservatorship of Fannie Mae and Freddie Mac, though he was vague about how that goal could be achieved.

“Today, Americans face significant challenges in an economy that has not created enough opportunities for working men and women,” Bessent said before the Senate Finance Committee. “We have an affordability crisis, a housing shortage and for the first time in my lifetime, parents feel as though the American dream is slipping away from their children.” 

Bessent may also play a role in advancing President Trump’s tariff plan, which could entail a 25% levy on all goods from Canada and Mexico and 60% on products imported from China. Increased tariffs will potentially drive-up housing costs further, as approximately 7% of all goods used in new residential construction originate from another nation. 

DOT takes action to align policies with President Trump’s agenda

The U.S. Department of Transportation (DOT) took a series of actions aimed at advancing President Trump’s agenda by rescinding policies from the Biden-Harris Administration, rolling back regulations, and aligning DOT policies with the administration’s priorities. As part of this initiative, Transportation Secretary Sean Duffy signed the “Woke Rescission” Memorandum, directing DOT officials to identify and eliminate policies and programs that focus on climate change activism, Diversity, Equity, and Inclusion initiatives, racial equity, gender identity policies, and environmental justice. Additionally, the Secretary issued an order ensuring that DOT’s policies, grants, and loans prioritize economic principles and measurable benefits over ideological considerations. The new guidelines replace previous rules by prioritizing funding, contracts, loans and other assistance for communities with high marriage and birth rates, prohibit vaccine and mask mandates, and require alignment with the Trump administration’s immigration policies and other objectives set by the President or Secretary.

Senate THUD committee assignments announced

The Senate Appropriations Committee has unveiled its new subcommittee chairs, ranking members, and full membership rosters, including for the Transportation, Housing, and Urban Development (THUD) subcommittee. THUD is now chaired by former Ranking Member Sen. Cindy Hyde-Smith (R-Miss.), with Sen. Kirsten Gillibrand (D-N.Y.) serving as Ranking Member. 

The subcommittee’s full roster is listed below: 



• Sen. Cindy Hyde-Smith (R-Miss.) – Chair 
• Sen. Susan Collins (R-Maine) 
• Sen. John Boozman (R-Ark.) 
• Sen. Shelley Moore Capito (R-W.V.) 
• Sen. Lindsey Graham (R-S.C.) 
• Sen. John Hoeven (R-N.D.) 
• Sen. John Kennedy (R-La.) 
• Sen. Jerry Moran (R-Kan.) 
• Sen. Katie Britt (R-Ala) 
• Sen. Kirsten Gillibrand (D-N.Y.) – Ranking Member 
• Sen. Patty Murray (D-Wash.) 
• Sen. Dick Durbin (D-Ill.) 
• Sen. Jack Reed (D-R.I.) 
• Sen. Chris Coons (D-Del.) 
• Sen. Brian Schatz (D-Hawaii) 
• Sen. Chris Murphy (D-Conn.) 
• Sen. Chris Van Hollen (D-Md.) 

Fed pauses interest rate cuts 

The Federal Reserve Board of Governors Federal Open Market Committee (FOMC) announced that it will maintain the current target federal funds rate, the first of its decisions on the rate this year. The target will remain at 4.25%-4.5%, after being previously cut by a quarter-point in December. Federal Reserve Chair Jerome Powell highlighted that uncertainty was a driver of their decision to maintain the current rate but was careful to note that we have faced periods of worse uncertainty.  

“Yes, the price level went up for inflation,” Chair Powell said. “People are feeling that, and they are not wrong. But the kind of uncertainty we have now is a usual level of uncertainty about the economy.” 

Powell also stated that activity in the housing sector “seems to have stabilized”, though mortgage interest rates remain above 7%. When asked about how the target rate has impacted mortgage rates, Powell noted that the housing sector will continue to see held up activity for “reasons unrelated to our policy”.  

“Despite interest rate cuts amounting to a full percentage point by the Federal Reserve in the latter part of 2024, mortgage rates bounded higher,” said Greg McBride, Bankrate’s chief financial analyst. “Yields on 10-year Treasury notes, and ultimately mortgage rates, were on the rise due to stubborn and elevated inflation, faster than expected economic growth and worries about escalating government borrowing. If mortgage rates are going to come down in any meaningful way, inflation needs to resume the downward march to 2 percent.” 

President Donald Trump expressed disapproval of the maintained rate, blaming inflation on various diversity initiatives.  

CFPB reports on rental late fees and cash-out mortgage refinance borrowers 

The Consumer Financial Protection Bureau (CFPB) published two new reports analyzing national rental payment data, finding that rent is among the largest expenses for the 35% of renting American households, and that falling behind on rent payments is a significant indicator of financial stress and future eviction. 

These reports also found that though approximately 50% of renters who incur late fees are able to resume on-time payments, a significant portion of renters who incur an initial late fee struggle to recover; 20% of renters with at least one late fee have accrued five or more late fees within the last twelve months. These findings collectively suggest heightened financial distress among households affected by late fees. 

Another new report from the CFPB on the financial outcomes for cash-out mortgage refinance borrowers between 2014 and 2021 finds that borrowers generally use cash-out refinancing to pay off other debts, particularly credit card and auto loan debt, resulting in broadly improved credit scores. 

Over 50% of borrowers gave “pay off other bills or debts” as the most common reason for cash-out refinancing, and experienced sharp increases in their credit scores in the quarter after refinance. Credit card balances and use rates did rise back toward pre-refinance levels in the year following the refinance, but they did not return to pre-refinance levels within that time frame. Similarly, credit scores gradually worsened, but did not return to pre-refinance levels.