Recently, US President Trump has been continuously negotiating tariffs with multiple countries, with discussions and disputes playing out in the media and negotiation meetings, causing anxiety and uncertainty among investors. On the other hand, Elon Musk’s political statements and actions have also sparked different forms of resistance, leading to a sharp decline in Tesla’s sales volume and stock prices. As a result, the turmoil in the US economy has heightened the risk of recession, leaving many wondering about the potential impact on the real estate market. In this article, we will explore this issue from various angles.
Firstly, due to the tariff war initiated by Trump, US stock prices have plummeted significantly since the beginning of the year. The technology sector has been hit especially hard, with Nvidia falling by 16.43%, Apple by 14.01%, and Tesla experiencing a staggering 36.54% drop in stock price by March 13. Tesla expressed concerns about potential retaliatory actions from other countries due to the tariff war, leading to increased costs in its global supply chain and reduced international market competitiveness. Trump’s push for reciprocal tariffs has raised uncertainty among businesses and individuals, impacting decision-making and further exacerbating economic turmoil.
Despite Trump’s efforts to secure fair trade opportunities for the United States, his aggressive stance on tariffs continues, as he believes that the US has made concessions for too long and seeks equal treatment from other countries. The ongoing policy fluctuations have left many enterprises and individuals on edge, unable to make informed decisions and contributing to increased economic volatility and the strained relationships between the US and its trading partners.
In addition to the tariff war, another factor influencing the US economy is the Department of Government Efficiency led by Musk—DOGE. The department has made significant cuts in government officials and expenditures to reduce wasteful spending, saving approximately $115 billion according to its recent update. These savings are expected to benefit taxpayers and contribute to fiscal discipline. However, the uncertainty surrounding these policies has cast a shadow over the spring real estate market, impacting decisions related to property transactions.
As for mortgage interest rates, despite the economic instability, rates have been on a downward trend since January, offering opportunities for homebuyers and refinancers. The decrease in rates has been attributed to investor flight from stock markets to safer government bonds, leading to increased demand in the bond market and subsequent rate reductions. The Federal Reserve’s future interest rate decisions may further impact mortgage rates, depending on economic developments.
Regarding inflation and the housing market, the price of building materials has risen significantly due to tariffs, prompting manufacturers and home appliance companies to raise prices. This has had a considerable impact on residential construction costs, potentially leading to higher home prices and affecting builders’ confidence and new construction activity. Despite these challenges, experts believe that the risk of a significant housing market downturn remains relatively low, with various factors influencing market dynamics.
Overall, while uncertainties persist, Trump and Treasury Secretary Benson maintain a positive outlook, emphasizing the temporary nature of current disturbances and a focus on long-term economic health. Benson has stressed Trump’s commitment to promoting deregulation and lower interest rates to make homeownership more accessible to Americans. Despite the current challenges, they anticipate a return to stability in the near future.