Are tariffs going to drive mortgage rates higher and make homes less affordable? Many Chicago buyers and sellers are asking how tariffs affect the economy—and more specifically, how these political policies could impact the local housing market. In this guide, the Camille Canales Group explains what you really need to know about the potential effects of tariffs on mortgage rates, housing affordability, and home prices in Chicago, so you can move forward with confidence—not fear.
This blog also draws insights from Tom Ferry’s live video, featuring expert commentary from David Childers, CEO of Keeping Current Matters, to help Chicago homeowners and buyers make informed real estate decisions.
Why It's a Shift—Not a Crisis
There's no shortage of headlines stirring up fear: “Housing Crash Ahead,” “Tariffs Threaten Mortgage Market,” or “Is Real Estate in Trouble?” But as experts like David Childers explain, what we’re seeing now isn’t a crash—it’s a shift. And that distinction matters.
Here in the Chicago real estate market, Camille Canales and her team help clients respond strategically—not emotionally—to these shifts. By focusing on what’s actually happening, we can help buyers and sellers take control of their decisions, even during periods of uncertainty.
What Happens If Tariffs Increase? Impacts on Mortgage Rates and Housing Affordability
So, how do tariffs affect the housing market?
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Higher Building Costs: Tariffs on imported materials like lumber, steel, and appliances can raise the cost of new construction. That puts pressure on builders, potentially slowing down housing development in areas like Chicago’s West Loop, Bronzeville, and Avondale.
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Tighter Supply = Higher Prices: With fewer new homes being built, resale inventory becomes even more important—and more competitive.
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Inflation → Interest Rate Volatility: If tariffs cause broader economic inflation, the Federal Reserve might adjust interest rates, indirectly pushing mortgage rates higher—although historically, recessions and global uncertainty often lead to lower interest rates.
The bottom line: tariffs can impact housing affordability by increasing costs and straining supply. But they don’t necessarily spell doom—and in fact, may create strategic buying opportunities.
10 Key Facts Every Buyer and Seller Should Know Right Now
Based on the Tom Ferry + David Childers video and current market data, here are the most important takeaways:
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Control the Narrative
Don't let headlines do the talking. Educate your audience with local Chicago data and real-world facts. -
Tariffs Are Political Tools, Not Market-Killers
They’re more about political strategy than economic collapse. Plan accordingly, not reactively. -
We're Experiencing a Shift, Not a Crash
Market shifts happen. Smart real estate professionals—and their clients—adapt. -
Homeowners Are in Strong Financial Positions
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83% of mortgage holders have rates under 6%.
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Nearly 40% of U.S. homes are owned outright.
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29% of homeowners are equity-rich.
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Recessions Don’t Automatically Kill the Housing Market In 4 of the last 6 U.S. recessions, home prices rose. 2008 was the anomaly, not the rule.
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Low Inventory Will Cushion Prices Even with economic fluctuations, limited housing supply in Chicago supports price stability.
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Mortgage Rates Are Volatile—but Could Trend Down Rates hover near 6.75%—but if a recession hits, they may fall, giving buyers a window of opportunity.
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Builders Are Motivated to Sell
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31.4% of national housing inventory is new construction.
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Builders are offering incentives.
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They’re being cautious—unlike in 2008—so overbuilding isn’t a concern.
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Visual Data Builds Buyer & Seller Confidence Sharing equity charts, rate trends, and inventory graphs in your listings or buyer presentations is powerful—and it's a service Camille Canales Group provides for every client.
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Inventory Is Normalizing Experts project a 10–15% rise in housing inventory in 2025, returning to “normal” pre-pandemic levels seen in 2017–2019.
What This Means for Chicago Buyers
If you’re thinking of buying a home in Chicago:
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Act Before Rates Shift: Even a slight rate drop can significantly reduce your monthly payment.
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Explore New Construction: With builders offering incentives, you might find value in homes that are already built.
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Know Your Budget: While tariffs may cause some price increases, interest rate movement could offset this cost.
Camille Canales, a trusted Chicago Realtor, can help you navigate these moving parts—ensuring you get the best deal for your future.
What This Means for Chicago Sellers
If you’re planning on selling a home in Chicago:
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Don’t Wait for the “Perfect” Moment: Conditions are stable, and inventory is still limited—meaning your listing can stand out now.
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Highlight Buyer Incentives: Use data and context to frame your home as a smart purchase in an evolving market.
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Work With a Realtor Who Gets It: Camille Canales Group combines market insight with strategic marketing to help your property shine—even in a shifting landscape.
How to Talk About Tariffs Without Causing Panic
The phrase “how do tariffs affect the economy?” is rising in search popularity. Here’s how to keep the conversation grounded:
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Acknowledge the issue without overreacting.
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Frame it in context: housing remains resilient due to equity and limited inventory.
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Focus on what buyers and sellers can control—strategy, timing, and guidance from a knowledgeable real estate agent.
Camille Canales Group does this every day for clients across Chicago—from Andersonville to South Shore to Oak Park.
Final Thoughts: Stay Smart, Stay Informed, Stay Confident
Headlines may spark anxiety, but facts fuel decisions. Whether you’re a first-time buyer, a growing family looking to sell, or an investor watching the economy, understanding how tariffs affect the housing market puts you in a stronger position.
The Camille Canales Group is here to guide you—not with fear, but with facts, strategy, and personalized support for your goals.
📩 Ready to take the next step? Email us at [email protected] or call 773-377-9200 to speak with a trusted Chicago real estate agent today.
