New Tariffs Mean Much More for Mortgage Rates Than You Think

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 6 February 2025

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

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Summary

Tariffs and trade wars could affect mortgage rates much more than most Americans think. You’ve heard on the news that tariffs on Canada mean higher gas prices, tariffs on Mexico mean a bigger grocery bill, and tariffs on China lead to electronics and appliances becoming even more expensive. However, as a real estate investor or homeowner waiting to refinance, the key number to watch for the impact of tariffs is interest rates. Today, we’re breaking down how the tariffs will affect you, which prices will rise, which real estate investments will become even more costly, and how interest rates have been held hostage by tariff threats. If tariffs are contributing to the current high mortgage rates, could tariff concessions lead to lower rates? If President Trump can work out deals with trade partners, would this mean a cheaper mortgage payment? We’re breaking down tariffs, trade wars, rising prices, and how they’ll affect your real estate investments. In This Episode We Cover New tariff update: which countries have reached a deal and which are currently tariffed Why mortgage rates are surprisingly affected by tariffs and trade wars Who pays the tariffs once they’re in place (most Americans have this WRONG) A post-tariff inflation prediction and whether we’ll bump back to pandemic inflation levels Trump’s two primary goals for imposing tariffs on Canada, Mexico, and China And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders Dave's BiggerPockets Profile On The Market 290 - Redfin: Tariff Fears Drive Up Mortgage Rates, Throwing 2025 Off-Track Know the Numbers BEFORE You Invest with “Real Estate by the Numbers” Jump to topic: (00:00) Intro (03:21) Tariffs Imposed, Now Paused (05:26) Trump’s Tariff Goal (07:48) Who Pays the Tariff? (12:17) Inflation Prediction (13:19) Which Prices Will Rise? (16:49) Cars Could Cost Much More (19:04) China's 10% Tariff Starts Now (20:24) Big Mortgage Rate Effects Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-293 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Last weekend, the Trump administration imposed the strictest tariffs we've seen in decades on Mexico, China, and Canada.
0:07.8	And since then, things have been changing a lot very rapidly.
0:11.9	And as of today, Tuesday, February 4th, when I'm recording this episode, we have a little bit of a break as tariffs with Canada and Mexico are on hold for the next month. But tariffs that were
0:23.7	implemented against China remain in place. And China has announced retaliatory tariffs against
0:29.5	the U.S. There is a lot going on. And clearly, this is a very fluid, quickly changing
0:36.0	situation. But it really matters. It is important to the entire
0:40.6	U.S. economy, but it is also really important to real estate investors in particular. It could
0:46.8	impact you in terms of course of your personal wallets, but it could also impact the costs you
0:52.9	pay to build and maintain your own portfolio. And it could also impact the costs you pay to build and maintain your own portfolio.
0:55.9	And it could also impact the all-important variable of the year, which is, of course, mortgage rates.
1:03.2	So today I'm going to catch you up on what's been happening, why it matters, and what to
1:07.5	keep an eye out for as things continue to develop in the coming weeks, months,
1:12.5	and perhaps even years.
1:18.7	Hey, everyone, it's Dave, and welcome to this episode of On the Market.
1:24.0	We're doing a very quick turnaround on this show because the situation with tariffs
1:29.0	has been so rapidly changing that it's hard to make commentary and then put it out onto the
1:37.0	internet and have it still be true by the time it gets out there. Just the other day,
1:41.3	I recorded a YouTube video that I had to can because everything had
1:44.6	changed within the hour I was recording. The same exact thing happened on Instagram, on on TikTok.
1:51.0	I was making those. So we're going to do our best today. I am putting out all of the information
1:55.6	that we have and my opinions and analysis of the situation as of the afternoon of Tuesday, February 4th,
2:03.1	because even though tariffs are sort of this broader, big economic type policy that has
	...

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