The cost of housing construction in Mexico could increase by 3 to 4% this year following the introduction of 25% U.S. tariffs on steel and aluminum, the Mexican Chamber of the Construction Industry (CMIC) announced on Tuesday.
On March 11, the United States imposed 25% tariffs on all steel and aluminum imports, of which Mexico is a top supplier along with Canada and Brazil. U.S. President Trump has threatened to impose tariffs on other Mexican goods starting April 2, which could further contribute to this cost increase.
The president of the National Chamber of the Housing Development and Promotion Industry (Canadevi) Carlos Eduardo Ramírez Capó said that tariffs have not yet slowed investment in housing projects, although developers are taking greater caution.
“The damage will be directly proportional to the duration of the tariffs if it is imposed. If we have an escalation, if we don’t reach an agreement, and they remain in place for six months or a year, there will be an impact,” Ramírez said in an interview with the newspaper El Economista.
Meanwhile, the CEO of the Mexican Real Estate Bank (BIM) Rodrigo Padilla Quiroz said that no projects have been cancelled so far, though developers are proceeding with caution.
Padilla stressed that it’s not only the rising materials costs that Mexico should be concerned about but also the impact of the United States’ trade policy on employment in the construction sector.
“The biggest concern is a slowdown in [domestic] employment. The greatest impact [of the tariffs] is on families because it postpones their ability to generate property wealth. Without a doubt, the most serious issue is that it will affect Mexicans’ purchasing power,” Padilla was reported saying.
Does Mexico have a housing shortage?
Some developers also suggest that incentives to reactivate construction are lacking in Mexico, which is experiencing a housing shortage of approximately eight million homes.
In 2024, 128,147 homes were built in Mexico, which is the lowest level recorded since the Single Housing Registry began in 2013. Three out of every 10 (33.62%) residential construction projects in 2024 were low-income housing, which had an average value of 521,484 pesos (US $26,000).
In October, Mexican President Claudia Sheinbaum announced plans to construct one million new homes countrywide over the next six years with an investment of 600 billion pesos (US $29.7 billion), which could help bolster Mexico’s housing sector.
Impact on industry
Mexico produced 18.2 million tonnes of steel in 2024, down from 19.85 million tonnes in 2023, largely due to weaker demand. It exported three million tonnes in 2024, with 2.3 million tonnes going to the U.S.
Mexican steel mills plan to add over five million tonnes of steel production per year by the first half of 2026, according to industry publication Argus Media. However, with a potential decrease in overseas demand, Mexican steelmakers may begin to feel the impact of a sluggish domestic market.
With reports from El Economista and Argus Media
