- 24% of Americans are canceling plans for major purchases due to new tariffs, per Redfin (RDFN, Financial).
- Tariffs are impacting the housing market with increased construction costs and mortgage rate volatility.
- 34% of Americans lack emergency funds for housing payments.
According to a survey by Redfin (RDFN), 24% of Americans are abandoning plans for significant purchases, such as homes or cars, due to the new tariff policies introduced by President Trump. An additional 32% are postponing such purchases. The survey, conducted by Ipsos, included 1,004 U.S. adults and highlights the broader economic impact of these tariffs.
The tariffs, which include a baseline rate of 10% on all countries and 145% on China, have contributed to stock market volatility and a decline in consumer confidence, eventually affecting the housing market. The survey found that more than half (55%) of respondents are less inclined to make major purchases this year, with factors such as mortgage rate fluctuations and increased construction costs contributing to this hesitation.
Political affiliation also plays a role, with 36% of Democrats canceling major purchases compared to 15% of Republicans. In terms of age demographics, 60% of individuals aged 55 and older are less likely to make large purchases, contrasting with 54% of those aged 18-34 and 50% of those aged 35-54.
The survey revealed concerning financial preparedness data, highlighting that 34% of Americans do not have emergency savings to cover housing payments. Renters are particularly vulnerable, with 53% lacking emergency funds compared to 23% of homeowners.
The tariffs' impact on the housing market is evident, as they contribute to mortgage rate volatility and heightened construction costs, both of which are diminishing homebuying demand. Redfin's Chen Zhao noted that while there is a growing fear of recession posing a risk to major purchases, there could be potential advantages for homebuyers if prices remain stable or decrease, and mortgage rates potentially drop.
