How International Trade Tariffs Influence Mortgage Rates—And What That Means for Spokane’s Real Estate Market.

As we navigate the shifting landscape of global trade and economic policy, one question remains top-of-mind for many in the real estate and mortgage industries:
How do international trade tariffs—especially those from the Trump administration—impact mortgage rates today, and what does that mean for Spokane’s real estate market?

Understanding the Tariffs

During his administration, former President Donald Trump imposed a series of tariffs on imported goods from major U.S. trading partners such as China, the European Union, Canada, and Mexico. These tariffs were intended to reduce America’s trade deficit and bring manufacturing jobs back to the U.S. While these goals were domestic, the impact has been global and long-lasting.

These trade restrictions raised the cost of many imported goods—including construction materials like steel, aluminum, and lumber—many of which are critical in real estate development. In Spokane, where homebuilding is still catching up to demand, these increased material costs have added pressure to already tight housing inventory.

Tariffs & Inflation

When tariffs raise the price of imported goods, companies often pass those costs on to consumers. This contributes to broader inflation—something we’ve seen play out in everything from groceries to home improvement supplies. For the housing market, inflation doesn’t just make it more expensive to build or renovate—it can also influence borrowing costs.

In Spokane, where home prices have risen sharply over the last several years, even modest inflation can have a big impact on affordability. With many buyers already stretching their budgets, rising prices due to tariffs can further complicate their ability to enter the market.

The Fed and Mortgage Rates

While the Federal Reserve doesn’t directly set mortgage rates, its decisions on interest rates greatly influence them. When inflation rises, the Fed may increase rates to cool the economy. These rate hikes affect the yield on the 10-year Treasury note, which is closely tied to mortgage interest rates.

In the Spokane market, higher mortgage rates can change the equation for both buyers and sellers. For buyers, higher rates mean higher monthly payments—sometimes pushing them out of certain price brackets. For sellers, it may mean a smaller pool of qualified buyers, which can affect how quickly a home sells and for how much.

Investor Sentiment

Tariffs also shake up global markets by creating uncertainty. Investors tend to respond to uncertainty by shifting their money into safer assets like U.S. Treasury bonds. This increased demand for bonds usually lowers yields—and by extension, mortgage rates—in the short term.

However, if tariffs are viewed as a long-term obstacle to economic growth, investor confidence may weaken. This could push the Fed toward more defensive monetary policies, potentially keeping rates higher for longer. Spokane’s market—already experiencing significant migration and growth—could see a cooling effect as borrowing becomes more expensive.

What This Means for Homebuyers and Sellers

While the original round of Trump-era tariffs began years ago, recent rhetoric and policy proposals suggest they could intensify again. This continued uncertainty can create volatility in mortgage rates, which directly affects the Spokane real estate landscape.

For Homebuyers:

• Mortgage rate volatility means it’s wise to monitor rates closely and consider locking in a rate when conditions are favorable.
• Rising costs tied to tariffs may affect how much home you can afford, so budgeting more conservatively may be a smart move.
• Consider working with local lenders who understand Spokane’s specific market dynamics and can help you navigate the rate environment.

For Sellers:

• Higher mortgage rates may reduce the number of qualified buyers, potentially lengthening the time your home stays on the market.
• You may need to adjust pricing expectations or offer seller incentives, like helping with closing costs or buying down a buyer’s rate.
• Understanding broader economic trends can help you time your sale more strategically, especially if tariffs are likely to keep pushing rates higher.

Spokane Real Estate Snapshot – April 2025

• Median Home Value: $390,180 | Up 1.3% over the past year.
• Median Sales Price: $353,817 as of February 2025.
• Median Days on Market: 39 days as of March 2025.
• Mortgage Rates: Expected to hover around 6.5% – 6.8% for most of the year.

Final Thought

At Vista Title and Escrow, we’re committed to helping you stay informed on the broader economic forces shaping our industry. While trade tariffs may seem far removed from the world of home buying and title services, their impact on inflation and interest rates makes them an important topic for anyone watching mortgage trends.

Stay tuned to our blog for more real estate insights that help you navigate today’s market with confidence.

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