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Do Tariffs Impact Home Buyers?

How will the most recent tariffs actually affect the American consumer, and anyone hoping to finance the purchase of a home or refinance their existing home through one of Orion’s brokers? The higher prices that importers will pay means either higher prices for consumers or squeezed margins for businesses.

Earlier tariffs, by design, impacted categories further up the production pipeline, like steel and aluminum, but this latest round impacts finished goods like toys, clothing and consumer electronics, with the more direct consumer exposure giving this round of tariffs the ability to really harm consumer confidence. Either importers could push back on costs from suppliers (suppliers may have little room to budge on their margins and/or contract prices have they been set), or tariff costs could be passed on to consumers and homebuyers.

In previous rounds aimed more at intermediate goods, tariffs on inputs were only a part of a finished goods’ final costs. Now, with the full value of many finished goods subject to tariffs, there is less scope for businesses to absorb the additional cost. Retailers and wholesalers already operate under thinner margins than manufacturers, meaning some of the tariffs that importers pay will be passed on to consumers via higher prices. Orion’s brokers report that some of their clients are indeed impacted.

The fact that higher prices for consumer goods might be lurking around the corner for our broker’s customers does not mean that consumer spending is going to fall off the map because of the tariffs, but higher prices will either lead to lower sales of these items (the same amount could be spent on less goods), a decline in other spending categories, or result in a lower saving rate.

Every week, nearly every day, Orion’s brokers see rate sheets move due to trade talks. At some point it will cease. The latest escalation in the trade war likely means that after so much effort in previous rounds to avoid collateral damage to consumer confidence and spending, consumers are now in the crossfire of the trade war. Higher prices alone may not derail consumer spending or the desire to purchase and finance a home, but to the extent that higher prices get into consumers’ heads it could weigh on sentiment and eventually spending. As a result, until trade tensions dissipate, our brokers can expect to see every rumor or development move rates.


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