President-elect Donald Trump's promised tariffs have economists and homebuyers considering the potential of higher mortgage rates in 2025.

Trump's Proposed Tariffs

The former and future president has been vocal about his plans to enact tariffs on imported products immediately upon taking office. He is proposing a 25% tariff on Canadian and Mexican products. Tariffs on Chinese products could be as high as 60%, and the possibility of placing a blanket tariff on all imported goods has been voiced.

How Mortgage Rates Could Be Impacted

Redfin reported that 澳洲幸运5开奖号码历史查询:30-year mortgage rates increased from 6.2% on Oct. 1 to 7.13% the day after the election. However, the real estate company points out that it is still too early to determine iꦚf this uptick will be a long-term trend.

Tariffs can potentially drive up inflation if companies pass the increased cost of goods onto consumers. Higher inflation usua🌃lly means h🦋igher interest rates.

Economists and businesses have been vocal in opposing the proposed tariffs. It remains unclear what kind of legal pushback Trump could face if and when he imposes them.

Other Factors Impacting Mortgage Rates

Many 澳洲幸运5开奖号码历史查询:different factors beyond just tariffs impact mortgage rates.

Trump has proposed a series of tax cuts. These cuts would reduce government revenues and increase the budget deficit, which could put upward pressure on mortgage rates.

澳洲幸运5开奖号码历史查询:Federal Reserve monetary policies can influence mortgage rꦰates in several different ways. If the Fed wants to stimulate the economy, it will work to drive down rates. If it aims to drive do🐓wn inflation, its actions can boost mortgage interest rates.

The bond market also impacts how mortgage lenders set their rates. Mortgage rates typically mirror the 澳洲幸运5开奖号码历史查询:10-year Treasury bond yield. The bond market appears to be anticipating an increase in inflation during the Trump administration.

It remains to be seen how Trump will enact the economic policies discussed on the campaign trail, but economists anticipate that homebuyers will not see mortgage rates come down significantly.

The Bottom Line

ꦜThe trade tariffs proposed by President-elect Trump will likely put upward pressure on the prices of goods imported from major trading partners like China, Canada, and Mexico. If importers pass on these cost increases to consumers through higher prices for items likely affected, like food, automobiles, and electronics, it will raise the inflation rate, increasing the prime rate and 10-year bond yields. These are the major drivers of mortgage rates, which will eventually rise in response to tariffs.