Here’s how housing market has reacted to Donald Trump’s tariffs — Impact on buyers and sellers, construction costs, mortgage rates

Donald Trump tariffs have ignited growing fears of a slowdown in the US housing market in 2025, as economic recession fears spread across financial markets.
With the US housing market already facing affordability concerns, analysts say further tariffs would further suppress market activity.

Stock Market Reaction Raises Alarm

Markets responded strongly to the news by President Donald Trump of a broad 25 percent tariff on Canadian and Mexican imports.
Even though Trump postponed applying some tariffs, the uncertainty did shake investor confidence.
The S&P 500 index fell sharply by 3 percent, and the Nasdaq fell 4 percent, indicating concern over a wider economic effect, as mentioned in a report by Newsweek.

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Senior economist Joel Berner of Realtor.com highlighted that the sudden fluctuation in the market may reduce the financial ability of potential homebuyers.
«The decline of the stock market implies that potential buyers could lose some of the wealth they had in mind to spend on down payments, which may push more individuals out of the market,» Berner explained, as quoted in a report by Newsweek.

Housing Market Already Under Pressure

The U.S. housing sector has been troubled by high rates of mortgages, record-high prices of homes, and a consistent lack of homes available for purchase.
These troubles have already pitted many purchasers on the sidelines and compelled sellers to reduce their prices as properties linger unsold for longer periods.

«The market has been trending cooler, and with increasing tariffs and recession worries, this may pick up steam,» Berner added, noting that 2025 is already seeing a rise in price cuts and extended selling times.

Would Tariffs Cause a Recession?

Though U.S.