No sector will seemingly be immune to President Donald Trump's tariffs. Housing will be impacted not just by the tariffs themselves, but also by the uncertainty they create. Yahoo Finance Senior Reporter Claire Boston breaks down the impact.
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Uncertainty around the impact of President Trump's tariff policies looms over almost every aspect of our economy, including the housing market. So what do consumers need to know? Joining me now is our own Claire Boston. So Claire, we know Canadian lumber is exempt now from tariffs, at least for the moment, but what other items that go into homes could see an impact here?
Hi, Julie. Um so home builders are actually feeling somewhat okay about these tariffs. And that is because a lot of building materials at this moment appear to be carved out. You mentioned lumber. There will not be new tariffs on lumber. Um, and then also home builders import a lot of gypsum, which is a component of drywall from Mexico. There will Mexico carved out as well. Aluminum and steel won't see any new tariffs past that 25% that was previously implemented. Um, but there are going to be some increases on things like appliances, which are very heavily imported from China. So builders are feeling okay about this. But, uh, there's still a lot of questions about what these tariffs are going to mean for the housing market. Uh, the big thing is that buyers and sellers right now are probably feeling a little bit nervous. You know, they're looking at this plunge in the stock market. They're wondering what this means for the economy. That kind of uncertainty can really, really halt the housing market and kind of the spring home buying season in its tracks. And so some of the economists that I've talked to this morning are quite worried about that.
Yes, I can imagine they are. And what about the home builders themselves? What do these rising costs mean for them?
Yeah, it's, um, a little bit unclear. Um, you know, generally speaking, they're still expecting that home, or home builders will see, you know, some construction cost increases. Previously, they were expecting about $9,000 to $10,000 per home. It kind of remains to be seen what of that is going to get passed on to the consumer at the end of the day. Uh, so it's just, you know, the tariffs are so complicated. But there's still a lot of uncertainty about what this means. And, you know, uncertainty is a really difficult, uh, you know, feeling for the market and for this industry.
And you mentioned home buyers feeling uneasy, right? This cannot help. Um, and I also imagine, you know, it creates some uncertainty around pricing as it goes forward too. So home buyers, when they're going out and looking, I mean, what do they now have to consider?
Right. So one economist that I was talking to this morning pointed out that a lot of home buyers keep their down payments in the market. So when you have a day like today, when stocks are down 4%, you know, maybe even more, you know, that can really cut into their purchasing power pretty much immediately. You know, potential home buyers, if they're maybe worried about their job, that might also cause them to just sort of halt their process until they know more. Um, and so it remains to be seen, but, um, probably the market will slow down. Um, and, and I have to remind everyone that the market is still very, very slow. We're still in this deep slump caused by these high rates, these affordability issues. So unless you're a cash rich buyer who's really able to buy a potential dip, a lot of buyers are kind of in a tough place right now.
Yeah, most definitely. Claire, thank you. I appreciate it.
