Increased costs for builders due to the Trump administration’s tariffs threaten an already challenged housing market in Colorado, officials and experts in the state are warning.

While the administration of President Donald Trump hit pause on many tariffs, it kept in place 25 percent tariffs on steel and aluminum imports, which took effect March 12.

Housing experts and Governor Jared Polis’ office said the tariffs will make it more costly to provide housing in the state.

According to the Common Sense Institute’s most recent Housing Competitive Index, which uses metrics to measure housing supply and affordability, Colorado ranks last in the nation for housing competitiveness.

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“Despite the slowing of the overall population, the state has remained unable to produce the number of homes needed to meet demand,” CSI’s report released in January said.

CSI housing fellow Peter LiFari said the tariff impact on housing probably won’t be felt until the third quarter of the year.

"It's still very early to make a confident forecast but what I'm hearing is a 1-3 percent increase in cost as a conservative estimate, with impact likely beginning in the third quarter,” he said. “This would be the best-case scenario."

The tariffs are also on top of already increasing inflationary costs, with the most recent Bureau of Labor Statistics showing housing costs in the Denver metro area went up 0.53 percent in February and March.

The governor’s office said the tariffs threaten the state’s progress on making housing more affordable.

“Governor Polis has been proud to sign legislation to break down barriers to housing that Coloradans can afford, and is focused on building on that work this year with legislation that would allow for more modular homes, single stair developments, and construction defects action that would bring more townhomes into Colorado communities,” Shelby Wieman, the governor’s press secretary, said, “All of this work is threatened by President Trump’s tariff taxes, which is increasing costs for Coloradans and builders, making it harder for new homes to be built.”

This week state officials announced Colorado is part of a multi-state lawsuit challenging tariffs in the U.S. Court of International Trade.

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“The governor urges President Trump to consider how tariffs are raising costs for all Americans in all sorts of ways including the price of home construction,” Wieman added.

Nationally, 60 percent of builders who responded to the National Association of Home Builders/Wells Fargo Housing Market Index reported already have seen suppliers have increased or plan on creasing material prices because of the tariffs. The average increase is 6.3 percent, the builder’s group said.

“The [Colorado Association of Home Builders] is always concerned about policies that impact the price and availability of building materials, including lumber from Canada and building products from other nations,” said Ted Leighty, CEO of CAHB, which is the state affiliate of NAHB. “One of our primary focuses is our members’ ability to build attainably priced homes to meet our state’s housing needs. Anything that increases the cost to build homes reduces the opportunities for Coloradans to share in the American Dream.”

“We will continue to voice our concerns to Washington in hopes that tariffs and other policy changes do not make it harder to provide housing options across our state,” Leighty added.