Tariffs, Rates, and What It Means for Spring Buyers

President Donald Trump's recent "Liberation Day" tariffs are expected to impact the U.S. housing market by increasing construction costs and influencing mortgage rates. Following the announcement, mortgage rates fell sharply, with the average 30-year fixed rate dropping 12 basis points to 6.63%—the lowest since October. This decline reflects a market shift as investors moved from equities into U.S. Treasury bonds, which typically guide mortgage rates. At the same time, the tariffs are projected to raise new housing costs, with the National Association of Home Builders (NAHB) estimating a $9,200 increase per new single-family home due to higher prices on imported materials like lumber, appliances, and fixtures.

Ralph’s Take

Mortgage rates are expected to remain unpredictable as countries weigh their responses to the newly imposed tariffs. Competing economic forces are pulling rates in different directions. Slower growth, rising recession risks, and stock market declines are pushing bond yields — and mortgage rates — lower. Meanwhile, the NAHB is seeking tariff exemptions to ease the impact on builders and buyers. We may see a lively spring market — but economic headwinds could still disrupt momentum.