Most fast-growing housing markets don't rely on trade
It’s been about two weeks since the White House officially announced a slew of tariffs on imports to the United States. Though some of those taxes were paused for 90 days as of last Wednesday, some U.S. trade partners have already announced their own tariffs on American exports.
While it’s too soon to foretell the long-term implications of the tariff showdown, it’s becoming ever clearer that consumers will bear at least some of the brunt of the new taxes.
How that impact could be felt across the country varies, but when it comes to housing prices, historical data shows that trade may not have a drastic effect, according to a National Association of Realtors analysis released Tuesday.
The analysis suggested that in the past 30 years, states that are less reliant on trade have seen higher growth in their home prices. Take Florida, for example, where prices have grown 406% since 1994 but there is minimal export activity.
“People and income ultimately drive housing markets,” Nadia Evangelou, NAR’s director of real estate research and a senior economist, wrote in the analysis. “The states that led in home price growth were often those with rapid job growth in tech and services, high levels of domestic migration, and limited housing supply or zoning constraints. … There's no doubt that trade created winners — regions like Dallas, Houston, Charleston, and Phoenix developed as major logistics hubs. However, the broader data suggests that trade alone wasn't sufficient to elevate housing markets consistently.”
Unemployment and inflation worries are building again
Consumers are growing concerned about the job market and price growth, according to a survey the New York Federal Reserve released Monday.
The Survey of Consumer Expectations provides a glimpse of how consumers felt about the economy, including price growth, housing prices and labor, in March.
Respondents indicated that their outlook on inflation is souring and that they expect inflation to speed up over the next 12 months to about 3.6%, according to the survey results. It’s the highest expected rate of inflation since the survey’s October 2023 findings.
At the same time, expectations that the unemployment rate in the U.S. will grow over the next 12 months climbed to their highest reading since April 2020. And more respondents think they have a higher probability of losing their job in the next 12 months.
The findings come just days after another widely watched survey from the University of Michigan revealed its fourth consecutive month of declining consumer sentiment. It’s a trend that’s started manifesting as concerns about tariffs and wider economic downturn have plagued the market.