More than 70% of Americans believe that Trump’s tariffs will negatively impact the US housing market, with just over half predicting that the markets close to the Canadian border will be hit hardest by lumber tariffs. However, despite concerns, a staggering number (80% or more) said they would not delay purchasing a home over trade war concerns.
That is according to new data obtained by REsimpli, who surveyed 1,200 Americans days before Trump hit global markets with reciprocal tariffs:
“33.75% of people expressed a high level of concern that the trade war may have on the housing market supply chain,” according to Asad Zaman, who shared the new data with Wood Central over the weekend: “One of the most striking is that 66.42% believe Canadian investors will pull back from the US housing market due to Reciprocal Tariffs.”
And then there is household liquidity: “69.50% expect the housing market to become less liquid during a trade war, sparking fears of a potential slowdown in property transactions…(whilst) 55.92% of respondents expect negative impacts on long-term home affordability.”
As a result, more than 73% of respondents believe the trade war will have at least some effect on homebuyers’ ability to secure loans or mortgages, though most expect the impact to be moderate rather than severe.
Builders stockpile lumber to avoid tariffs – but at what cost?
Mr Zaman shared the new data with Wood Central in response to an article published earlier this month claiming that spooked builders are now stocking up on lumber, windows and other essential building materials to avoid price increases triggered by tariffs.
Already, Wood Central has reported that the powerful National Association of Home Builders (NAHB) has warned that the threat of tariffs has added $7500 and $10000 to the cost of a single-family house: “For years, NAHB has been leading the fight against tariffs because of their detrimental effect on housing affordability. In effect, the tariffs act as a tax on American builders, home buyers, and consumers,” according to the National Association of Home Builders, which took credit for Trump delaying tariffs on Canadian lumber last month.
It comes as investor confidence in publicly traded builders is “decidedly negative,” according to UBS Research Managing Director John Lovallo. Tariff-led concerns “started as soon as the November election,” according to Robert Dietz, the chief economist for the National Association of Home Builders. With high home prices and mortgage rates, builders plan to push harder for incentives like mortgage buydowns and all-cash discounts to prevent buyers from walking away.
“Buydowns are essential to keeping people in these markets,” said Dan Dunmoyer, president of the California Building Industry Association. “If anything, tariffs will make them a greater necessity.”
- To read more about the impact of tariffs on lumber prices, click here for Wood Central’s article from Monday.
