How Inflation and Tariffs Are Shaping the Housing Market

As inflation and tariffs push home prices up, knowing how mortgage rates will shift can give you a key advantage when purchasing your next home.

A lot of homebuyers aren’t fully aware of how tariffs, inflation, and mortgage rates can impact the housing market. These factors can affect your purchasing power as they can increase costs, making it harder to find a good deal on your dream home. Today, I’ll explain how these factors impact the market and what you can expect in 2025. Mortgage rates are easing. Mortgage rates peaked at 8% in 2023, but good news is that they’ve dropped to just over 6.5% and are expected to keep falling. Experts predict rates could dip to around 6.3% by the end of this year. That could mean lower monthly payments for homebuyers, making this a great opportunity to enter the market if you’ve been waiting on the sidelines. Lower rates can make homes more affordable, which is always a good thing for potential buyers. Economic activity is a key factor. While mortgage rates are important, economic activity also plays a big role in the housing market. Strong job growth, rising wages, and new industries all drive demand for housing. When people feel financially secure, they’re more likely to buy a home. However, economic slowdowns or recessions often lead to higher interest rates, which can cool off the market and reduce demand. It’s a delicate balance between economic growth and market stability. "Rising inflation and tariffs are creating uncertainty in the housing market, making it critical to understand their impact on prices and buying power." The impact of inflation and tariffs. Inflation isn’t just a buzzword—it impacts your purchasing power. As inflation rises, the cost of everything from groceries to home-building materials increases. That means your money may not stretch as far when you’re looking to buy a home. On top of that, tariffs disrupt supply chains, causing prices to rise even further. This double-whammy effect makes things more expensive and creates uncertainty for both businesses and consumers. If you're thinking about buying a home, inflation and tariffs might make it harder to get the deal you want. What does all this mean for you? The housing market in 2025 will depend on how falling mortgage rates, economic activity, and inflation pressures balance out. If rates continue to drop and the economy remains strong, housing activity could pick up. However, if inflation continues to rise and tariffs cause more disruption, the market could stall. It’s a critical time to stay informed and ready to act when the conditions align with your homebuying goals. Understanding tariffs, inflation, and mortgage rates can help you make informed decisions on when to buy your dream home. Being able to identify the opportunities when you can purchase at a lower price will help you save a lot of money. If you’re planning to buy a home soon or have questions about how these factors affect your buying power, you can call or text me at (978) 852-3001 or email me at PBrouillette@LaerRealty.com. I’m here to help you figure out your options and how you can take advantage of the current market conditions.

Can You Buy a New Home Before Selling Your Current One?

Learn three key strategies to buy your next home before selling your current one—without the stress of double mortgages.

In an ideal world, the sale of your old home would line up perfectly with the purchase of your new one. But in reality, real estate transactions don’t always go that smoothly. You might find your dream home before your current one sells—or worse, sell your home and have nowhere to go. So, can you buy a new home before selling your current one? The short answer is yes, but it requires careful planning. Let’s explore your options.

1. Sale contingencies and delayed closings. One option is adding a sale contingency to your contract, meaning your new home purchase depends on selling your current home first. This protects you from being stuck with two mortgages, but in a competitive market, sellers may prefer non-contingent offers. Another approach is negotiating a delayed closing, giving you extra time to sell while still securing your new home. Your agent can help structure this to your advantage.

2. Bridge loans and rent-back agreements. If you need financial flexibility, a bridge loan can cover the gap between buying and selling, allowing you to make a strong, non-contingent offer. Just keep in mind that bridge loans usually come with higher interest rates and shorter terms. Another strategy is a rent-back agreement, where you sell your current home but stay in it temporarily, paying rent to the new owner while you finalize your next move.

"Buying before selling works with planning, smart financing, and the right strategy."

3. Explore alternative solutions. If those options don’t work, there are other creative ways to make the transition smoother. Companies like Flyhomes, Orchard, and Knock offer programs that help you buy before you sell. You could also consider renting out your current home for passive income or selling to an iBuyer for a fast, cash transaction. However, keep in mind that convenience often comes at a lower sale price.

While buying before selling can be convenient, it’s not always the best financial move. Carrying two mortgages at once or relying on a quick home sale can be risky. That’s why working with an experienced real estate agent is crucial—they can help you navigate the market and find the best approach for your situation.

If you're considering buying a new home before selling your current one, let’s talk. I’ll walk you through your options and help you make the best decision based on your unique situation. Schedule a call today, and let’s create a strategy that works for you!