HousingWireHousingWire
It’s an important week for the global economy as President Donald Trump’s pending trade policies are poised to have a massive impact on the costs of goods and services. They could also precipitate harsher conditions for a housing market that has yet to fully unfreeze.
HousingWire’s Mortgage Rates Center shows that rates have flatlined in the past month. On Tuesday, 30-year conforming loan rates averaged 6.8%, unchanged from a week ago, while 15-year conforming rates averaged 6.68%, up 1 basis point in the past week.
Wednesday is a key day for the direction of mortgage rates and the U.S. economy in general. That’s when a slew of Trump’s tariff proposals are set to take effect. The Trump camp has labeled April 2 as “Liberation Day” as officials believe the U.S. will benefit in the long term through increased domestic manufacturing and less reliance on foreign goods.
Reciprocal tariff policies that would see the U.S. match every tariff placed on it by every other trade partner have the potential to create chaos across the global economy. And exemptions for goods covered under the United States-Mexico-Canada Agreement (USMCA) — including key materials used by homebuilders — are set to expire Wednesday.
A recent consumer survey published by real estate technology firm REsimpli shows that Americans are concerned about the impacts of tariffs on an already hobbled housing market. Among the key findings of the 1,200-person survey, 72% believe reciprocal tariffs will harm the U.S. housing market.
Similar shares think that U.S. housing market liquidity will decrease and that Canadian investors will reduce their activity in the U.S. And about half of respondents say there will be negative impacts to housing affordability, mortgage rates and property taxes as a result of the tariffs.
“Our findings suggest that the potential impact of US-Canada trade tensions on the housing market could be more complex and far-reaching than initially anticipated,” Resimpli concluded. “The combination of expected supply chain disruptions, changing investor behavior, and shifting consumer sentiment points to potential challenges ahead for the U.S. housing market.
Melina Duggal, senior director of market analytics at CoStar Group, told HousingWire via email that the implications of tariffs on the construction industry aren’t yet known.
“If the tariffs are implemented, we would expect homebuilders to look for new supply chain options,” Duggal said. “Whether the tariffs completely offset any incentives depends on the extent of the tariffs and the amount of the incentives. Given how aggressively national homebuilders have been offering incentives, there is unlikely much room for them to offer more.”
While tariff-driven increases in building material costs could eventually translate into higher prices for new homes, there is evidence to suggest that new homes will remain relatively affordable.
CoStar-backed Homes.com analyzed sales prices for existing homes and new homes from 2016 to 2024. It found that the median sales price for an existing home jumped 76% to $394,000, while the price for a new home rose 37% to $421,000.
Duggal noted “signification variation in the price appreciation” of new homes sold across the four major U.S. regions. During the same eight-year period, the Northeast posted price growth of 72%, followed by the West (49%), Midwest (39%) and South (33%).
“Areas with high income growth, high employment growth, and high apartment rent growth tend to experience high home price appreciation,” Duggal said. “Most new homes sold in the U.S. are in the South, which has experienced relatively robust income growth, but not as much as the Northeast, for example.
“Another factor that could contribute to lower price appreciation for new homes is that the supply of existing homes has been dropping while the supply of new homes has been increasing. We expect this trend to continue,” she added.
HousingWire Lead Analyst Logan Mohtashami wrote on Saturday that tariff impacts will play an important role in Federal Reserve policy decisions moving forward. Employment data is likely to have a larger influence on these decisions than inflation for now, he added. Further insights will be gleaned from the U.S. Bureau of Labor Statistics’ March jobs report, which will be released Friday.
“Growing concerns about the economy are becoming more evident, as some consumption figures have come in lower than anticipated,” Mohtashami said. “Also, the consumer sentiment data is falling off a cliff as trade war headlines and confusion on policy have spooked people with rising inflation expectations and less security about employment.”
