The real estate market is always shifting, influenced by economic policies, supply and demand, and unpredictable external factors. With recent discussions around tariffs, affordable housing initiatives, and potential changes to mortgage regulations, many buyers are wondering how these shifts might impact their home purchase. While no one can predict the future with certainty, here’s what we do know and what to consider when planning to buy a home.
Potential Tariff Increases on Lumber
If tariffs on lumber increase, the cost of building new homes will likely rise. Lumber is a significant component of home construction, and a price hike can directly impact the affordability of newly built properties. Currently, two key building components are sourced from Mexico and Canada, making these tariffs a major factor in the final cost of new homes.
What this means for buyers:
If you're considering new construction, now might be the best time to get under contract with a builder and lock in your price before costs go up.
Waiting could mean paying significantly more for the same home in the near future.
While more affordable housing options may emerge, higher material costs will likely prevent a drastic drop in new home prices.
Executive Order on Affordable Housing
A recent executive order aims to address affordable housing, but the specifics remain unclear. However, there are a few potential benefits that could result from this initiative, such as:
- Lower closing costs by reducing transfer taxes and administrative fees, making homeownership more accessible.
- More housing options, as zoning changes may encourage the development of condos, townhomes, and other affordable solutions.
- Incentives for new construction and innovative building methods to speed up development.
What this means for buyers:
If lower costs and more housing become available, first-time buyers and those on a budget could have more opportunities to enter the market. However, high interest rates and material costs could still limit price reductions.
Faster approval processes for developments could help create more housing, but local zoning laws—not just federal policies—remain a major barrier to increasing supply.
Since these policies take time to implement, immediate affordability improvements aren’t guaranteed.
Potential Privatization of Fannie Mae & Freddie Mac
There has been ongoing discussion about privatizing Fannie Mae and Freddie Mac, two major government-backed entities that help stabilize the mortgage market. If privatized, lenders may take on more risk, which could lead to:
- Without government backing, Fannie Mae and Freddie Mac could face higher borrowing costs, leading lenders to raise mortgage rates to offset the increased risk for investors.
- Stricter lending requirements, making it harder to qualify for a loan.
- A stronger focus on profit rather than affordability, potentially increasing financial risks for borrowers.
What this means for buyers:
While no president directly controls interest rates, economic policy and regulations play a big role in how lending works.
If mortgage rates increase, waiting to buy could mean paying more over time for the same home.
The impact of privatizing remains uncertain, but for now, they continue to support homeownership, making it essential for buyers to stay informed and work with a knowledgeable mortgage professional.
So… Is Now the Right Time to Buy?
The reality is, no one can predict exactly how the market will shift. Housing could become more affordable—or it could become more expensive. Here’s what we do know:
📌 Home prices tend to rise over time.
📌 Interest rates fluctuate constantly.
📌 Trying to time the market perfectly is a gamble.
Instead of focusing on market speculation, the smartest approach is to buy when it makes the most sense for you and your financial situation. If homeownership is your goal, preparing financially, staying informed, and working with me will help you make a confident and strategic decision.
