Mexico’s housing construction costs may rise by 3-4% due to U.S. tariffs on steel and aluminum. The National Chamber of the Housing Development Industry notes cautious investment from developers. Additionally, Mexico faces a housing shortage of about eight million homes, prompting government initiative for new construction. The steel sector is also experiencing production challenges.
The housing construction costs in Mexico are anticipated to rise by 3 to 4% following the U.S. imposition of 25% tariffs on steel and aluminum imports, as announced by the Mexican Chamber of the Construction Industry (CMIC). The tariffs were implemented on March 11, impacting Mexico, a major supplier alongside Canada and Brazil. U.S. President Trump has also threatened additional tariffs on other Mexican goods, potentially exacerbating cost increases.
Carlos Eduardo Ramírez Capó, President of the National Chamber of the Housing Development and Promotion Industry (Canadevi), indicated that the tariffs have not yet deterred investments in housing projects. However, he noted that developers are proceeding with increased caution. Ramírez stated, “The damage will be directly proportional to the duration of the tariffs if it is imposed. If we have an escalation… there will be an impact.”
Rodrigo Padilla Quiroz, CEO of the Mexican Real Estate Bank (BIM), affirmed that no projects have currently been canceled, yet developers remain cautious. He emphasized that rising material costs combined with the U.S. trade policies could adversely affect employment within the construction sector. “The biggest concern is a slowdown in [domestic] employment… it will affect Mexicans’ purchasing power,” Padilla noted.
Mexico is facing a significant housing shortage, with approximately eight million homes needed. In 2024, only 128,147 homes were constructed, marking the lowest output since 2013. Notably, low-income housing made up 33.62% of residential construction projects in 2024. In response, President Claudia Sheinbaum announced a plan to construct one million new homes within six years, with an allocated investment of 600 billion pesos (US $29.7 billion).
In 2024, Mexico produced 18.2 million tonnes of steel, showing a decline from 19.85 million tonnes in 2023, mainly due to weaker demand. The country exported three million tonnes of steel, with 2.3 million tonnes directed to the U.S. Predictions suggest that Mexican steel mills aim to enhance production by over five million tonnes annually by mid-2026. However, decreasing demand could challenge domestic markets.
The impact of U.S. tariffs on steel and aluminum will likely drive up housing construction costs in Mexico, with potential repercussions for investment and employment in the construction sector. Despite current caution among developers, the urgent need for housing remains, highlighting the importance of government initiatives to stimulate construction. Looking ahead, the domestic steel industry’s response to evolving market conditions will be crucial for maintaining a robust housing sector in Mexico.
Original Source: mexiconewsdaily.com
