HousingWireHousingWire
President Donald Trump stunned the world on Wednesday by announcing a new tariff regime that is sweeping in scope and shocking in scale.
Every country in the world is now subject to a baseline levy of 10% on all goods imported to the U.S., while countries that Trump considers “bad actors” will receive significantly higher tariff rates. These include some of America’s largest and most dependable trade partners.
Major U.S. stock indices cratered Thursday morning on the news, and companies in the real estate and mortgage industries are no exceptions.
Homebuilders are getting hit particularly hard. As of midday Thursday, publicly trade companies in this sector were down somewhere between 6% and 8% from the prior day. Toll Brothers, LGI Homes and Meritage Homes saw some of the sharpest declines.
This is not surprising as homebuilders depend on construction material imports from some of the countries slapped with the largest tariff rates, including China (34%) and Vietnam (46%).
Notably absent from new tariffs are Canada and Mexico. Trump previously imposed 25% tariffs on the U.S. neighbors, but he later granted a one-month pause on goods that comply with the United States-Mexico-Canada Agreement (USMCA).
While that grace period was scheduled to expire Wednesday, reports suggest that the pause on USMCA goods will stay in effect — for now. Fortunately for homebuilders, lumber is one of these goods, as the vast majority of sawmill products come from Canada.
But no companies in the housing space have been spared from the stock market route. Major public brokerages were down anywhere from 4% to 7%, with Anywhere Real Estate, eXp World Holdings and Compass getting hit the hardest.
Mortgage companies are faring relatively better. Fresh off blockbuster acquisitions of Redfin and Mr. Cooper Group, Rocket Companies was up slightly on Thursday, while others were down only slightly.
