Will New Tariffs Keep Mortgage Rates High in 2025?

By Shelby Campbell

With over two and a half decades of unwavering commitment to the mortgage industry, I am your seasoned Mortgage Loan Officer dedicated to helping individuals and families achieve their homeownership dreams.

As a mortgage lender, part of my job is helping people make smart, well-timed decisions about financing their homes. But lately, I’ve had many clients asking the same question: “Are these new tariffs going to make buying a home even harder?”

The short answer is they might. President Trump’s new tariffs, starting with a 10% tax on most imports and 25% on imported vehicles, may sound like something that only affects global trade deals. But trust me, they could ripple directly into home prices, mortgage rates, and your overall budget.

Here are three key ways these changes could impact your ability to buy, build, or refinance a home and what you can do to stay ahead of the curve:

1. Construction costs are set to rise. Homebuilders rely heavily on imported materials like lumber, drywall, and appliances—many of which come from countries like Canada and Mexico. In fact, about 10% of U.S. construction materials are imported. Under this new policy, those materials now face a 10% tariff. The National Association of Home Builders (NAHB) estimates this could add $7,500 to $10,000 in additional costs per newly built home.

Why does that matter to you as a buyer? Because if builders are paying more for materials, they will pass those costs along to you. And here’s the kicker: we’re already dealing with tight inventory and rising home prices. Add higher construction costs into the mix, and affordability becomes an even bigger challenge.

2. Mortgage rates could stay higher for longer. This one hits close to home for me as a lender. Tariffs can drive up inflation, which is the biggest reason we haven’t seen mortgage rates come back down yet. Despite campaign promises to lower rates to 3%, we’ve been stuck above 6.6% for months, and the Federal Reserve has made it clear that they’re watching inflation closely.

If these tariffs push consumer prices higher, the Fed may delay or even cancel rate cuts that were previously on the table. That means borrowing costs could stay elevated longer than expected. So, if you’ve been waiting for rates to drop before jumping into the market, you may need a new game plan.

3. Your buying power could take a hit. First came higher home prices. Then, stubbornly high mortgage rates, and now this: new tariffs could cost the average household an extra $1,253 every year, according to the Tax Foundation. From where I sit, that’s real money; that’s the difference between qualifying for the home you love or settling for less. It’s not just about numbers; it’s about affordability and how we can help you protect it. When every extra dollar counts, losing buying power can feel overwhelming.

If you plan to buy or refinance, now is the time to have a strategic conversation. Here’s the good news: even in a shifting market, there are often creative ways to structure a loan that make your monthly payment more manageable, especially if we act before prices or rates rise further. Whether it’s getting you pre-approved, exploring flexible loan options, or creating a long-term plan, I’m here to help.

Book a one-on-one strategy call with me if you need expert guidance in a changing market. We can talk about your goals and what’s possible for you in today’s market. You can also call or email me with your questions, and I’ll help you understand your real numbers and create a plan that works.