After scouring and reading through a ton of articles, I've compiled this information from sources a lot smarter than me. While no one has a crystal ball, the latest round of tariffs on building materials could have a significant impact on mortgage rates, home prices, and inventory—all things that affect buyers and sellers in today's market.

What's Happening?

1. Mortgage Rates Could Stay Higher for Longer
Tariffs tend to drive inflation, and when inflation stays high, mortgage rates don't come down. Here's why:

• The more goods that get hit with tariffs, the more prices go up.
• The Federal Reserve is already cautious about cutting rates, and this gives them another reason to wait.
• The bond market, which influences mortgage rates, has already priced in some of these changes, but more unexpected tariffs could push rates even higher.

Bottom line: Mortgage rates are sitting at 6.5%, and while they could still come down, the timeline just got a lot more uncertain.

2. New Home Prices Will Likely Go Up
A huge portion of U.S. building materials come from Canada, and with tariffs in place, it's going to cost more to build homes. That could lead to:

• Higher prices for new construction as builders pass costs onto buyers.
• Fewer new homes being built, which means resale homes will get even more competitive.

3. Possible Economic Slowdown
If Canada, Mexico, and China respond with their own tariffs, we could see slower economic growth. That could mean:

• A weaker labor market, which could reduce overall housing demand.
• A worst-case scenario of stagflation—higher costs mixed with slower economic growth, making affordability even tougher.

What This Means for Buyers and Sellers

• Buyers: If you're waiting for mortgage rates to drop, they might not move much anytime soon. If new construction prices go up, resale homes could be a better value.
• Sellers: With new homes getting more expensive, resale homes could see more demand. If you're thinking about listing, this could be a great window of opportunity.

A Note From Me

I'm not an economist, but I've reviewed reliable sources like Realtor.com, the National Association of Realtors, and more to gather these insights. My goal is to help you cut through the noise and focus on the professional opinions that matter most.

Whether you're considering buying, selling, or investing, let's chat about how we can position you for success in 2025. Reply to this email or call me at 509-939-0602 to get started!

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