Issue Nº. 07 | Trump Tariffs Are Coming: Here’s Your DIY Prep Plan
Trump Tariffs Are Coming: Here’s Your DIY Prep Plan
Word count: 407
Estimated read time: 2 min
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Don't let the warmer weather and blooming flowers fool you: there’s an economic storm brewing. And I don't want you to be unaware!
Trump’s tariffs — 25% on Canada and Mexico, and 10% on China — kicked in this week, and they’re inevitably going to shake the housing market.
Here’s what’s coming and how to tackle it:
First, new homes are going to get pricier.
Experts say these tariffs could jack up construction costs by $7,500–$10,000 per house — mostly from Canadian lumber (30% of our supply) and Mexican gypsum becoming 25% more expensive. Builders won’t eat that, they’ll pass it to you.
We’ve seen this before. Back in 2018, tariffs added ~$9k on average to new builds. Within a few months, it'll feel like déjà vu. It's a bummer because affordability is already a beast, and this is only going to pile on.
Second, mortgage rates will likely take a dip — at least temporarily.
This is a complicated point, but simply put: economic uncertainty typically causes investors to flock to safe-havens like US Treasury Bonds. Increased demand for T-bills leads to lower yields. And mortgage rates are strongly tied to the yield on the 10-year Treasury bond. Lower yields on T-bills almost always results in lower mortgage rates.
We've already seen rates drop this week since the tariffs were announced. Depending on consumer confidence and stock market performance, it's likely that rates will fall further in the coming weeks.
Lower rates means buyers have more spending power, which will likely prevent house prices from falling much in most markets.
Third, we're unlikely to see much of a rise in housing supply.
In times of economic uncertainty, many would-be sellers decide to hold off on listing their homes.
Unlike the 2008 Global Financial Crisis where the bottom fell out on mortgage-backed securities, today's homeowners have greater equity and are locked in at historically low interest rates. That means there shouldn't be a massive wave of forced sales and foreclosures like we've seen in previous economic downturns.
Some markets, especially those that were saturated with investors and short-term rentals, may see greater spikes in new listings as investors seek to rebalance their portfolios. But most markets will likely see just a trickle of new listings rather than a steady stream.
So, what’s your DIY move?
New Construction: Act quickly if you're seeking to build a home. Lock in your price (and beware of escalation clauses in builder contracts!) before the increased cost of lumber and other materials are fully calculated into adjusted home sale prices.
Do Your Due Diligence: If you're planning to buy a fixer or do major renovations on a home you're considering, you need to be extra cautious in how you calculate your repair budget. Hire a good contractor and have them put together a bid while you're in the due diligence period of your contract to avoid costly surprises after closing.
Pad Your Budget: Add 4-5% buffer for price creep over the next few months — $20k-$25k to be safe on a $500k home today. (This is one more reason why you should go DIY and save the ~3% buyer's agent commission!)
Watch the Market: If rates dip from a slowdown, be ready to pounce fast and lock in your rate.
Tariffs suck for supply, but you’re not helpless. The whole industry’s feeling it, and yeah, it’s tougher — but you’ve got the grit to outsmart it.
Hit those open houses, lean on your DIY playbook, and let’s turn this mess into your win.
Your Home-buying Friend,
– Nick
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P.S.
Tariffs stressing you out?
Join our Happy Hour + Q&A, Thursday, April 10, 4pm PT, on the DIY Homebuyer Community on Skool.
Link’s in the Calendar tab — be sure to jump in. These calls have been awesome!
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Want more DIY Homebuyer News or got a thought to share?
Hit me up at nick@diyhomebuyeracademy.com
