Spring Housing Market Predictions: What To Know About Tariffs, Inflation & Prices
Written by
Gabrielle Olya
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
While you can’t really “time the market” when it comes to real estate, it’s a good idea for both prospective buyers and sellers to know what could be on the horizon.
Based on economic conditions, including newly imposed tariffs and inflation — which is currently down but is expected to rebound due to tariffs — here’s what you can expect for the spring housing market.
Tariffs Will Likely Lead To Higher Home Prices
President Donald Trump has announce tariffs on goods imported from Mexico, Canada and China, as well as a 25% tariff on all imported steel and aluminum, with more tariffs being threatened. While the goal is to boost the U.S. economy, in the short-term at least, the higher costs will likely be felt by American consumers — including homebuyers.
“It is likely tariffs will cause an increase in home prices due to higher construction costs from tariffs on essential materials like lumber and concrete,” said Emanuel Santa-Donato, SVP and chief market analyst at Tomo Mortgage.
“This squeeze will most likely slow builder production, increasing demand within already limited inventory,” he said. “High build areas — areas dependent on new construction, such as Austin, [Texas], and Orlando, [Florida] — will likely take the hardest hit.”
Mortgage Rates May Swing Wildly Throughout the Season
The current uncertainty about where the economy will go this year will translate into swings in mortgage rates, Santa-Donato said.
“Rates are more volatile than we’ve seen post-pandemic, with sharp swings driven by market uncertainty,” he said. “While we still expect rates to flatline by the end of 2025, the near-term outlook is unpredictable. The market is confused, and sentiment is all over the map, leading to knee-jerk reactions that are driving extreme rate movements.”
Inflation Will Likely Slow Home Sales
Those looking to sell this spring may have a difficult time.
“Inflation will likely slow home sales this spring as people worry about higher costs, a volatile rate environment and job security,” Santo-Donato said. “Even if home prices don’t rise, everything else getting more expensive means buyers have less money left over for housing. Affordability is getting tighter, and for a lot of people, that could mean pressing pause on homebuying.”
More From GOBankingRates
