If you’ve been keeping an eye on the news, you’ve probably heard that the U.S. is hitting Canada with new tariffs, especially on steel and aluminum. While this might sound like just another political headline, it actually has real consequences for homebuyers, homeowners, and the housing market in general. Here’s what you need to know—without the complicated jargon!
Home Construction Just Got More Expensive
The U.S. has doubled tariffs on Canadian steel and aluminum, which are essential materials for building homes. That means homebuilders are now paying more for supplies, and those extra costs will likely get passed on to buyers. So if you’re thinking about buying a new home, you might see higher prices. If you’re a homeowner planning renovations, be prepared for materials to cost more than they did last year.
Could Mortgage Rates Go Up?
Tariffs can push prices up, and when inflation rises, the Bank of Canada sometimes raises interest rates to keep things in check. If that happens, mortgage rates could go up too, making borrowing more expensive. For those with variable-rate mortgages, this could mean higher monthly payments. If you’re planning to buy a home, it might be smart to lock in a mortgage rate sooner rather than later.
Will This Affect Home Prices?
Trade wars create a lot of uncertainty, and when people feel unsure about the economy, they tend to hold off on big purchases—like homes. If fewer people are buying, the housing market could cool down, which might stabilize prices or even bring them down a little. That’s good news for buyers, but sellers may not get as much for their homes as they hoped.
What About Jobs and the Economy?
When the U.S. imposes tariffs, Canada usually responds with its own. If this turns into a bigger trade war, businesses that rely on exports could take a hit, and that could lead to job losses. If people start worrying about job security, banks might get stricter about who qualifies for a mortgage. So, even if home prices drop, it could be harder to get approved for a loan.
Even Home Repairs Could Cost More
It’s not just new homes that are affected—anyone doing renovations or repairs might feel the pinch. The price of things like appliances, windows, and hardware could rise because many of these products or their parts come from the U.S. Planning a kitchen remodel or upgrading your furnace? You may need to budget extra.
What Can You Do?
With all these changes, here’s how you can stay ahead:
- Watch mortgage rates: If you’re thinking of buying or refinancing, keep an eye on rates and consider locking in sooner rather than later.
- Budget for higher costs: If you’re planning a renovation, get quotes now and see if it makes sense to move forward before prices go up.
- Stay informed: Government responses to tariffs can change quickly, so knowing what’s happening can help you make smarter financial decisions.
The Bottom Line
While tariffs might seem like a far-off economic issue, they actually impact home prices, mortgage rates, and even the cost of home improvements. If you’re planning to buy, sell, or renovate, it’s important to stay informed and work with professionals who can help you navigate the changes. If you have any questions about how this could affect your mortgage, let’s chat!
