On The Market
Mortgage Rates Fall EVEN Further as “Tariff Tuesday” Triggers Stock Sell-Off
Mar 6, 2025
The latest economic shifts are causing quite a stir. 'Tariff Tuesday' triggered a stock market sell-off, raising concerns about a looming recession. Meanwhile, mortgage rates are surprisingly dropping despite inflation fears. What does this mean for real estate investors? Rising costs of materials and retaliatory tariffs could complicate the housing landscape. As uncertainties rise, strategies for navigating investments in real estate and stocks are more crucial than ever. Will rates continue to fall, or have we hit rock bottom?
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Quick takeaways
- The imposition of tariffs on imports is raising construction costs significantly, which could deter new home building and affect housing supply.
- Despite rising inflation concerns from tariffs, falling mortgage rates provide a potential advantage for real estate investors amid economic uncertainty.
Deep dives
Impact of Tariffs on Construction Costs
Tariffs imposed on goods from Mexico, Canada, and China are significantly affecting construction costs in the United States, particularly for real estate investors. For instance, the cost of imported lumber from Canada has risen by 25%, making it more expensive for builders to source materials necessary for new homes. This situation could deter construction activity as builders face higher expenses and lower profit margins, potentially leading to a decrease in the housing supply over time. Consequently, this may have longer-term implications for home prices and the overall real estate market's growth.
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