Trump’s plan, introduced this week, proposes a 10 percent baseline global tariff on imported goods, with higher rates for specific countries.
A new round of tariffs announced by former President Donald Trump has set off alarm bells among economists and housing market analysts, who warn that the economic ripple effects could push mortgage rates higher.
This could make homebuying more difficult for Americans already squeezed by inflation and limited inventory.Why It Matters
Mortgage rates have become one of the key challenges in the U.S. housing market, making it harder for buyers to afford homes while also persuading current homeowners to stay in their current home. Many potential sellers are reluctant to list their homes because doing so would mean taking on a new mortgage at rates much higher than the ones they already have, creating inventory shortages.
« The bond market moves on inflation, economic data and global events like tariffs or political uncertainty », Nicole Rueth, senior vice president of Movement Mortgage, said in an interview with CNET. « Buyers waiting for 3 percent rates again are wasting time. Those days are gone. »
The intersection of trade policy and the housing market is now front and center for Trump’s presidency, which has made the economy its top focus. Rising home costs are increasingly being felt by Americans as affordability remains a challenge.What To Know
Trump’s tariff plan proposes a 10 percent baseline global tariff on imported goods, with higher rates for specific countries—including 35 percent on Chinese imports and 24 percent on goods from Japan.
While touted as a means to protect U.S. manufacturing, the tariffs could lead to « higher prices, slower economic growth, higher unemployment and higher construction costs », Redfin’s housing economist Chen Zhao wrote in a post on the company’s blog.
Core inflation could climb to 3.5 to 4 percent by year’s end—up from the current 2.
