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The Impact of Trade Wars

How will the international trade wars affect the local housing market? According to a ValueInsured survey of homebuyers, Americans have a strong opinion on this question. The survey found that while 56 percent of the respondents believed that trade wars could affect the housing market, 44 percent said that they wouldn't.

Among those who believed that trade wars would impact the housing market, 29 percent homebuyers said that this problem would lead to a rise in construction costs and drive up home prices, while 27 percent believed trade wars would hurt the economy and drive down home buying demand as well as prices.

However, the largest number of respondents, 44 percent, said that trade wars would have little or no effect on home prices or demand.

The survey also asked homeowners about the impact, if any, that the trade wars would have on housing. Homeowners, the survey revealed, tend to believe that the intensifying trade wars would drive up home prices. This notion was particularly popular among younger and urban homeowners, the survey said.

Among this group, 42 percent believed trade wars would drive up home prices, while 23 percent said that they could hurt homebuyer demand. Generation-wise too, while 44 percent of millennial homebuyers believed that trade wars would drive up construction costs and home prices, this generation was equally divided between those who believed prices would be driven down and those who thought that the effect of trade wars would be minimum at 28 percent each.

"In contrast, homeowners over age 65 are more than twice as likely (64 percent) to believe home-buying demand and home prices are not affected by trade wars," the survey said.

However, ValueInsured said that this generation cohort could be wrong. Citing a recent article by the Washington Post, the survey said that the trade wars had put a nearly 21 percent tariff on lumber imported from Canada, which provides one-third of the construction lumber in the U.S., the lumber prices had risen 15 percent.

About Author: Radhika Ojha

Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master’s degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika.Ojha@theMReport.com.
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