Redfin: Home-Price Growth Slows as Buyers Retreat
A new Redfin report reveals that a significant number of U.S. residents, 24%, are canceling plans to make major purchases such as homes or cars due to the impact of President Trump’s new tariff policies. These tariffs, which include 10% baseline tariffs on all countries and a hefty 145% tariff on China, have led to market volatility and raised concerns about a possible economic downturn. According to a Redfin-commissioned survey conducted by Ipsos between April 10-14, 2025, nearly a third of Americans (32%) are postponing major purchases due to these tariffs.
The survey, which included 1,004 U.S. adults, reflects growing unease about the economy and consumer confidence. As tariffs have caused fluctuations in the stock market, economists are increasingly worried about their potential to push the U.S. into a recession, particularly as they contribute to higher prices for goods and services. Though some tariffs have been temporarily paused, the effects continue to weigh heavily on U.S. residents’ purchasing decisions.
While 24% of respondents are canceling plans for significant purchases, 9% say they are accelerating their purchasing decisions, and 8% have already made major purchases sooner than expected. These figures highlight the deep divide in how different groups of Americans are reacting to the economic climate fostered by new tariffs.
The survey also shows significant political divides in how tariffs are perceived. More than a third of Democrats (36%) are canceling major purchases, and 43% are delaying them, while only 15% of Republicans are canceling purchases, and 21% are postponing them. This partisan divide illustrates the varied concerns between different political groups about the economic consequences of tariff policies.
Impact on the Housing Market
The tariffs are poised to have a lasting impact on the housing market in several ways. One of the primary concerns is the potential for rising construction costs. Tariffs on raw materials and goods used in construction could drive up housing prices, making it more difficult for Americans to afford homes. The uncertainty in the housing market is compounded by fluctuations in mortgage rates, which are being influenced by tariff policies and broader economic instability.
With tariffs contributing to increased costs and economic instability, homebuyers are facing greater challenges in making large financial decisions. As a result, demand for homes has softened, which could impact both home prices and the availability of homes in the market.
Furthermore, the increased costs from tariffs are cutting into buyers’ budgets, making it harder for some to save for down payments. According to Redfin’s survey, one in five potential homebuyers are considering selling stocks to fund their down payments. However, as the stock market continues to fluctuate due to tariff-driven instability, these plans may be jeopardized, leaving many homebuyers in limbo.
Redfin’s Economics Lead, Chen Zhao, notes that the heightened probability of a recession, with betting markets placing the odds above 50%, is making consumers wary of committing large amounts of money to purchases like homes or cars. Zhao explains that as uncertainty looms over job security and rising everyday expenses, many consumers are becoming more cautious and are tightening their financial belts.
Despite these challenges, there may be some potential silver linings for homebuyers. With demand weakening, home prices could stabilize or even decrease, and there is a possibility that mortgage rates may dip in the coming months, providing some relief to those looking to purchase homes in the near future.
Tariff Impact on Major Purchases
According to the Redfin survey, 55% of Americans reported that the new tariff policies have made them less likely to make a major purchase this year. Only 13% indicated that they were more likely to make a significant purchase due to the tariffs. Among the respondents aged 55+, 60% said the tariffs made them less likely to make a major purchase, compared to 54% of respondents aged 18-34 and 50% of those aged 35-54.
However, some age groups are more likely to accelerate their purchasing plans. Among younger Americans, 23% of people aged 18-34 said the tariffs made them more likely to make a significant purchase, compared to just 15% of those aged 35-54 and only 4% of those aged 55+.
The survey also shows a stark contrast in views across political lines. A significant majority of Democrats (79%) said the tariffs made them less likely to make a major purchase, compared to just 32% of Republicans. This partisan gap underscores the broader political divide on the economic implications of the new tariff policies.
The Strain of Economic Uncertainty
In addition to tariff-related concerns, many Americans are also facing financial instability. The survey revealed that 34% of U.S. residents do not have an emergency fund to cover their monthly mortgage or rent payments in the event of a financial crisis, such as job loss. Financial experts typically recommend having enough savings to cover about three months of expenses, but given the increasing fears of a recession, many experts now suggest saving closer to six months’ worth of housing payments.
Renters are disproportionately affected by the lack of emergency savings, with 53% reporting that they do not have an emergency fund. In contrast, only 23% of homeowners said they lacked such savings. This data highlights the greater vulnerability of renters, who are more susceptible to economic fluctuations that could impact their ability to meet housing costs.
Among those who do have an emergency fund, 56% report having savings that cover between 0 to 6 months of housing payments, while 14% have enough for 7 to 12 months, and 23% have more than 12 months’ worth of housing payments covered. Interestingly, households with children are more likely to have smaller emergency funds, with only 12% of such households having more than 12 months of housing payments saved up. In comparison, 29% of households without children have that level of savings.
Younger Americans are also less likely to have a large emergency fund. Just 5% of respondents aged 18-34 have saved more than 12 months of housing payments, compared to 27% of those aged 35-54 and 32% of those aged 55+.
