What Trump’s ‘Liberation Day’ Tariff Moves Mean For Home Prices And Mortgage Rates

"Homebuyers are already stretched thin by high listing prices and mortgage rates, so even this relatively small increase in cost will keep many of them on the sideline who may have otherwise become buyers in 2025," he adds.

Realtor.com® Senior Economist Joel Berner. estimates that almost $10,000 of the cost of a new home today is due to tariffs, including a 14.5% tariff on Canadian lumber that pre-dates Trump's second term.

The NAHB estimates that 72% of imported lumber comes from Canada, and 74% of imported gypsum—used for drywall production—comes from Mexico.

For the housing market, the new tariffs could mean higher construction costs for homebuilders, to the extent that they impact the imported materials used in home construction.

Tariffs could also impact mortgage rates, if they keep inflation higher for longer, as many economist fear they will.

Prolonged inflation would prompt the Fed to reduce or reverse future cuts to its policy rate, which all else equal would keep mortgage rates higher for longer.

In 2025, a 10% universal tariff would increase costs for US households by $1,253 on average, the Tax Foundation estimated.

That inflationary effect could drive mortgage rates higher. On the other hand, if tariffs drive the economy into recession, as some economists fear, mortgage rates would be likely to decline.

Awaiting Immigration Crackdown, Some Homebuilders Wonder Who’ll Build The Homes

“When you kind of get down to the subcontractors that work in the residential space in particular, you’re talking about a full third of the workers are immigrants,” said Jim Tobin, CEO of the National Association of Home Builders.

Homebuilders fear Trump's mass deportations would inflate costs and make it even harder to hire.

Remainder Of The Article: Cracks In The Housing Market Are Starting To Show: https://dpl-surveillance-equipment.com/economics-and-finance/cracks-in-the-housing-market-are-starting-to-show/