If you're in real estate, you’ve felt the shift. The 2025 tariffs didn’t just raise prices on Canadian lumber or Mexican steel—they’ve rippled across the entire real estate market. Materials cost more. Projects are stalled. And for investors in Salt Lake City, the math is looking a lot different than it did a year ago.
Still, the real estate world has always been a long game. And with home prices rising, rents holding strong, and inventory tight, many investors are still making it work, just differently.
So the real question isn’t whether the market is tougher. It is. The real question is: Can you still win?
This guide breaks down how these new tariffs are shaking things up, what’s happening in the Salt Lake housing market, and how smart investors are shifting strategy in 2025.
New Tariffs, Real Consequences
In early 2025, the U.S. rolled out new tariffs on Canadian and Mexican goods, including:
- A 14.54% combined duty on softwood lumber, including anti-dumping and countervailing duties.
- Higher duties on aluminum imports
- Retaliatory tariffs from other countries affecting U.S. exports
The purpose of these new tariffs is to encourage domestic production and reduce foreign competition. This resulted in some economic fallout. There are higher prices on key building materials, supply chain disruptions, and builders are stretched thin.
In fact, the National Association of Home Builders reports material costs are up by 2% compared to last year.
Construction Costs and Delays
Whether you're investing in new developments or remodeling an existing property, you're likely feeling the pressure.
- Builders are reporting softwood lumber prices that are 23.5% higher than they were in 2024
- Projects are delayed due to shipping bottlenecks and a shortage of alternative suppliers
- Tariffs influence labor and logistics costs, which leads to more construction expenses
That’s leading to paused multifamily developments, budget overruns in commercial real estate, and rising costs that investors must absorb—or pass on to tenants.
Housing Market Trends and Home Prices in Salt Lake City
As construction slows, housing inventory tightens. And in a place like Salt Lake City, where housing demand keeps climbing, that leads to higher home prices.
In April 2025, the median home price in Salt Lake City climbed to $599,000, up 0.91% year-over-year, according to Wolfnest’s latest market update. While that's great for homeowners, it's a challenge for first-time buyers and new investors hoping to get in.
What’s driving that?
- Limited new construction due to higher costs
- Increased demand and tight inventory
- More competition for existing homes
Housing affordability is increasingly out of reach for buyers, but on the flip side, it strengthens the rental market, which is a key silver lining for landlords.
Interest Rates and Inflationary Pressures
Inflation’s still a beast. With construction materials getting more expensive and tariffs affecting international trade, the Federal Reserve has been trying to cool things off.
The Fed decided to maintain its benchmark interest rates at 4.25%-4.5% in May 2025, bringing the average 30-year mortgage rate to 6.76%, compared to the 7.09% a year ago. These interest rate tariffs are changing how both investors and buyers view the cost of borrowing.
This matters because:
- Borrowing costs are still high, keeping monthly payments elevated
- First-time buyers are getting priced out, boosting rental demand
- Refinancing existing properties is less appealing for leverage plays
These inflationary pressures and interest rates are changing how investors operate. Cash flow, not short-term gains, is driving strategy. Long-term rentals in stable markets like Salt Lake City are becoming the safer bet.
Economic Growth and Consumer Spending
The broader economy is feeling the strain. U.S. GDP shrank by 0.3% in Q1 2025, and forecasters like S&P Global now project growth to slow to 1.3% by year’s end. Consumer spending isn’t collapsing, but it is shifting. People are pulling back on big-ticket items like cars and appliances, while essentials like housing and healthcare still see steady demand.
That slowdown is rippling through industries tied to housing and construction, where cost sensitivity is high. But Salt Lake City’s local economy is holding up. Strong population growth, solid job gains in tech and healthcare, and a relatively balanced housing market keep it standing out as a safer bet for real estate investments, even when the national numbers look shaky.
Investment Strategies for Navigating Tariff Challenges
Now more than ever, investors in the real estate industry need to play it smart. Here's how some are adapting:
- Shifting from new builds to existing properties to avoid high construction costs
- Investing in real estate investment trusts (REITs) that spread risk across multiple markets and asset types
- Leaning into the rental market, which remains strong even as homeownership becomes less attainable
Salt Lake City remains a solid bet, especially when backed by a local expert like Wolfnest, which helps investors maximize returns through efficient property management.
Navigate Tariffs and Inflation with Smart Property Management
When new tariffs, interest rate swings, and inflation collide, the difference between a profitable investment and a money pit often comes down to who’s managing your property. At Wolfnest, we don’t just collect rent—we help investors in Salt Lake City make smarter, more resilient decisions that keep cash flow steady, even when the market gets bumpy.
Our team understands the challenges real estate investors face in 2025, from construction delays and rising costs to tighter lending conditions. That’s why we’ve built systems to support your long-term strategy, not just short-term fixes. Whether you're a first-time investor or scaling a portfolio, having the right local partner matters.
Here’s how Wolfnest helps you navigate economic pressure:
- Maximize rent without pricing out tenants by understanding the influence of rental property design on tenant behavior
- Reduce vacancy time with smart marketing and tenant screening
- Streamline maintenance despite rising construction expenses
- Lock in protection with guarantees designed for investor peace of mind
- Use our free ROI Calculator to stress-test your returns in real-time
Real estate is still worth it in 2025—but only with a strategy. The margin for error is slimmer, but Salt Lake City remains solid ground for growth if you plan right. Let’s crunch the numbers together. Check out our Premium Management Plan with a 20% off limited-time offer and see what’s possible even in this wild market.
FAQs
How can I increase the value of my rental property in a competitive market?
To boost the value of your rental property, consider modernizing kitchens and bathrooms, enhancing curb appeal with landscaping or fresh paint, and adding energy-efficient features like smart thermostats or upgraded insulation. These improvements make your property more attractive to tenants, help you command higher rents, and increase overall property value in a competitive market.
Are real estate investment trusts (REITs) a safer option with the new tariffs in place
REITs may offer more stability in a market affected by rising construction costs and tariffs. Since they invest in income-producing properties rather than handling the construction process directly, REITs can help mitigate the risks associated with material price volatility and delayed construction timelines.
Are there specific real estate sectors more resilient to the effects of the 2025 tariffs?
Certain real estate sectors, such as multifamily housing and properties with long-term leases, may be more resilient to tariff impacts. These sectors often have more stable cash flows and can better absorb increased costs. Additionally, properties that rely less on imported materials for construction or renovation are less affected by tariff-induced price hikes.
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