Tariffs, particularly on building materials like lumber, steel, and appliances, are expected to increase construction costs and potentially lead to higher home prices, impacting both new home construction and renovations.
Redfin reported that instability caused by the new tariffs will almost certainly cause volatility in mortgage rates and make the path of rate cuts from the Federal Reserve (previously forecasted as two or three 25-basis point reductions) more uncertain. Short-term economic damage is also expected to push up unemployment and inflation.
Chen Zhao, who leads the Redfin economic team, said that the odds of a recession in the next 12 months rose from 15% at the start of 2025 to 40% after the latest tariffs.
Tariffs are causing:
· Increased Construction Costs:
Tariffs on imported building materials, such as lumber, steel, and appliances, are expected to drive up the cost of these materials, leading to higher construction costs.
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