The U.S. tariffs on steel and aluminum may increase housing construction costs in Mexico by 3-4%. Despite current investments in housing projects, industry leaders express concerns over the long-term impacts on employment and purchasing power. Mexico faces a significant housing shortage, prompting government initiatives to boost home constructions.
The Mexican housing construction sector faces an anticipated cost increase of 3 to 4% in 2024 due to 25% tariffs imposed by the U.S. on steel and aluminum imports. These tariffs were implemented on March 11, affecting Mexico as a significant supplier of these metals, alongside Canada and Brazil. U.S. President Trump has indicated potential tariffs on additional Mexican goods, heightening concerns about further cost implications.
Carlos Eduardo Ramírez Capó, president of the National Chamber of the Housing Development and Promotion Industry (Canadevi), reported that while tariffs have yet to curtail housing project investments, developers remain cautious. He noted, “The damage will be directly proportional to the duration of the tariffs if it is imposed,” emphasizing that prolonged tariffs could exacerbate cost increases for housing construction.
Rodrigo Padilla Quiroz, CEO of the Mexican Real Estate Bank (BIM), indicated that no housing projects have been cancelled, but caution prevails among developers. He highlighted concerns about both increasing material costs and the potential negative effects of U.S. trade policies on employment in the construction sector, especially impacting families’ ability to build wealth through property ownership.
Mexico currently faces a housing shortage estimated at eight million homes, with only 128,147 homes built in 2024—the lowest since 2013. About 33.62% of these constructions were designated as low-income housing. To address the housing crisis, President Claudia Sheinbaum announced plans to build one million new homes over the next six years with a significant investment of 600 billion pesos (US $29.7 billion) aimed at stimulating the sector.
In terms of production, Mexico produced 18.2 million tonnes of steel in 2024, a decline from the previous year due to reduced demand. Additionally, it exported three million tonnes, primarily to the U.S. Mexican steel mills are striving to increase production capacity to over five million tonnes annually by mid-2026, although a potential downturn in international demand could strain the local market.
The impact of U.S. tariffs on steel and aluminum poses a significant challenge to the Mexican housing construction sector, potentially leading to higher costs and further complicating an existing housing shortage. While current investments in housing projects remain steady, the concern over long-term employment impacts and purchasing power looms. The government’s plans to boost home construction may offer some relief amidst these challenges.
Original Source: mexiconewsdaily.com
