Spring Market Outlook - Tariffs and Prices

How Tariffs Are Shaping the 2025 Housing Market—And What Buyers and Sellers Should Do Now

As global trade policies shift, the ripple effects are being felt right here at home—literally. New U.S. tariffs, particularly on imported construction materials, are raising the cost of homebuilding and influencing mortgage rates. Whether you’re looking to buy, sell, or invest, understanding how these changes impact the real estate market is more critical than ever.

How Tariffs Impact Home Prices

Tariffs are essentially taxes on imported goods, and builders often pass those added costs to buyers. Right now, roughly 10% of the materials used in homebuilding are imported. With new tariffs reaching up to 54% on goods from countries like China—and baseline 10% tariffs on most others—builders are seeing price hikes of $7,500–$10,000 per new home.

Pro Tip: If you’re planning to build, get quotes early and lock in costs wherever possible. Builders may offer better terms today than after future tariff hikes.

What This Means for Buyers

Higher construction costs = higher home prices. And with buyers already stretched by inflated mortgage rates, affordability continues to shrink. Even small price increases can push first-time buyers out of the market.

Actionable Steps:

• Set a budget based on your monthly payment, not just sticker price.

• Get pre-approved for a mortgage to understand what you can realistically afford.

• Consider homes in slightly less competitive or developing neighborhoods to get more for your money.

Pro Tip: Watch for builder incentives like interest rate buydowns or closing cost assistance—they’re becoming more common.

Tariffs and Mortgage Rates

Tariffs don’t just hit the hardware store—they ripple through the economy. Higher import costs fuel inflation, which influences the Fed’s interest rate policy. The longer inflation persists, the higher mortgage rates are likely to stay.

In 2025, average 30-year fixed rates remain above 6.7%, far from the 3% goal promised by campaign rhetoric. Unless inflation cools or the economy slows dramatically, we’re likely stuck here for a while.

Pro Tip: Even a minor rate reduction can save thousands over the life of a loan. Shop multiple lenders and consider paying points to lower your rate.

Market Outlook: Is a Crash Coming?

Not likely. Despite affordability challenges, we’re not in a bubble. Why?

• Inventory is still historically low.

• Many homeowners have high equity or no mortgage at all.

• Demand remains strong in growing regions.

Actionable Steps:

• Buyers: Stay flexible and act quickly when the right home appears.

• Sellers: Price competitively and ensure your home is move-in ready.

Opportunities in Uncertain Times

New home sales are growing, especially in the South and West, where construction remains more active. Meanwhile, regional events like wildfires and job shifts are shaping local conditions.

Pro Tip: Stay local. National trends matter, but real estate is hyperlocal. Work with agents who have a deep pulse on your market.

Pro Tips for Buyers

1. Know your monthly max. Factor in taxes, insurance, and utilities.

2. Be flexible on size and location. The best deal may not be in your first-choice zip code.

3. Study the market. Monitor price trends and time-on-market for homes you're interested in.

4. Don’t panic. Stick to what’s right for your lifestyle and budget.

Pro Tips for Sellers

1. Price it right. Use recent local comps and consider your competition.

2. Max out your curb appeal. First impressions matter—online and in person.

3. Fix what’s broken. Don’t give buyers a reason to walk away.

4. Hire a pro. A seasoned real estate team makes all the difference in a complex market.

Final Thoughts: Should You Buy in 2025?

There’s no perfect time—only the right time for you. Trying to time the market rarely works. Instead, focus on your financial readiness and long-term goals. Buying now may mean higher rates, but you can always refinance later. Waiting may cost you more if home prices keep rising.

Ready to make your move in 2025?
As real estate and loan experts, we’ll guide you through every step—from pre-approval to closing. Whether you’re buying, selling, or building, we’ll help you navigate this market with confidence.

Contact us today to discuss your goals and learn how we can help you succeed in today’s real estate landscape.