the Trump tariffs are in with the average tariff rate in America now going up to 22% the highest level since 1909 in response stock prices are crashing bond yields are going down and many people now fear that we're going to enter a recession if not a depression let's check this out everyone with Trump's reciprocal tariffs the average tariff rate in America is now up to 23% in 2025 so that's the average effective tariff rate if Trump keeps these tariffs active that's the highest tariff rate since 1909 so we literally haven't seen anything like this in about 120 years in the US and if you look a year ago our tariff rate was 2.4% so going from a 2.4% tariff to a 23% tariff that is going to have a big impact in the short term and what the data is saying is that the goods that are going to be most exposed to uh these tariffs are apparel as well as food and cars those are the three segments where US consumers are likely to see higher prices in 2025 due to the fact simply that anyone importing these goods is now going to have to pay a 10 20 maybe even 30% tariff depending on where the goods come from and you can see here this chart of the reciprocal tariffs shows where certain countries got hit hardest china is being charged a 34% reciprocal tariff the EU is being charged a 20% reciprocal tariff vietnam 46% Taiwan 32% Japan 24% India 26% South Korea 25% Thailand 36% Switzerland 31% and the list goes on uh these tariffs are big and it's going to be a big shift you can even see there's a headline up here trump says he's open to tariff negotiations contradicting what his aids in the White House are saying and so one thing we got to you know take almost maybe take these numbers with a grain of salt a little bit uh are they going to change in coming days coming weeks i believe they go active on uh anywhere from April 5th to April 9th depending on the type of tariff it is and so there is always a chance that these tariffs get dialed back and that the impact isn't uh potentially as severe as people had anticipated but let's just say the tariffs don't go away what is going to happen to the US consumer how much are prices going to go up for everyday goods well one way to answer this question is actually by looking at commodities how are the commodity markets reacting to Trump's tariffs and the results are actually really interesting for instance take a look at oil according to Business Insider oil prices are crashing after tariffs oil prices actually tanked more than 7.5% on Thursday with tar with Trump's tariffs battering energy markets as recession fears climb so that's interesting oil prices had their worst day in 5 years which somewhat contradicts the narrative that these tariffs are going to be uh inflationary in the long run because if the the tariffs were going to be inflationary in the long run commodity and oil prices would need to go up but yet commodity prices went down on today's news to illustrate this I want to show you an article that the Wall Street Journal just ran today it says that lumber avoids new tariffs and that prices plunge on fear of a housing slowdown with Canadian lumber being left out of Trump's tariff blitz which resulted in lumber futures contracts shedding 9% on the day the lowest price since midFebruary additionally the 10-year US Treasury yield went down 17 basis points today this is very interesting as well because if the tariffs were going to be truly inflationary you would see Treasury yields go up in response not down treasury yields going down is actually a deflationary signal it's a sign that people are piling into bonds because they expect economic growth to slow in the future and potentially some type of deflationary recession additionally folks mortgage rates went down 12 basis points today mortgage rates are now at their lowest level since about October so it's a bit of a mixed picture while some estimates say that consumer prices are going to increase 2.3% this year if these tariffs um go through we're seeing other indicators like treasury yields oil prices and lumber prices suggest that certain aspects of the economy might get cheaper potentially related to a recession and this is the big story to watch in 2025 i know everyone's focusing on tariffs in and of themselves but it's the fact that the economy has been slowing even in the months prior the economy has already been heading on a downward trajectory and in fact the Atlanta Fed GDP forecaster for the first quarter of 2025 is forecasting minus2.8% GDP growth in the first quarter which would be heavy contraction in the economy if that actually happens and I think a lot of you out there need to start updating your base case on what could happen in the economy over the next year because I think a lot of people have gotten maybe um tricked into thinking that no type of economic slowdown or recession could take place a lot of people I'm seeing them say out there that oh no no no like the economy is going to keep going the economy is going to keep moving forward um we're not going to see job losses things are going to keep going up asset prices are going to keep going up a lot of people convince themselves of this but the the more we go into 2025 the more it's becoming apparent that that's not the case for instance just look at the housing market if you're someone who wants to understand where prices on the housing market are heading in the future and if they could go up or down in your area just look at the housing inventory right now take a look at this everyone this is now the highest inventory since preandemic so we're basically back to March 2020 inventory and we're almost back to 2018 2019 inventory on the resale market so there is no more housing shortage that housing shortage narrative was true back in 2021 like there was a shortage of listings there is no longer a shortage of listings in addition the price cut rate on the housing market is now up to 23% of all listings according to this data from realtor.com in March 2025 23% of sellers reduced the price that's by far the highest price cut rate for March going back in the last 7 to 8 years and so what we're seeing there what the housing market is telling you about the economy is that home sellers are getting nervous they're getting nervous they're putting their houses on the market for sale and they're reducing the price at the most rapid pace that they've been doing in 7 to 8 years now despite that the prices are still high sure enough we're still in a housing bubble but the trends over here are all telling you that that bubble doesn't have long to last because as the inventory grows and as the price cuts grow you're going to see values in aggregate go down and I want to talk about a couple areas right now where the inventory is absolutely exploding on a month-over-month and year-over-year basis one such area actually folks is Colorado take a look at this in Colorado we're now up to 21,000 listings on the market March 2025 that is massive that is a massive surge from a year ago and we're now about 50% above the long-term average level of inventory suggesting that prices are going to go down in Colorado we also have something similar happening in Texas in Texas housing inventory is up to 113,000 homes on the market which is about 70% above that long-term average and of course Florida in Florida are now up to 177,000 listings and in terms of price cuts the markets and states with the highest price cuts in the US include Arizona Florida Colorado Oregon Nevada South Carolina Indiana Texas Tennessee and Georgia it's basically a list of the pandemic boom markets that's where prices are going down the most right now sellers are getting the most desperate conversely the lowest price cuts are in New York Connecticut New Hampshire Vermont and Rhode Island we're still seeing resiliency and strength in the Northeast of course now these sellers are having to contend with a collapsing stock market year-to- date the S&P 500 is down 8% while the Nasdaq is down 14% and the Russell 2000 is down 14% and the stock price declines were especially big today uh post tariff liberation day you could see that Apple is down 9% on the day amazon's down 9% jp Morgan's down 7% real estate companies are getting hit hard pretty much all the different stocks are taking this tariff news very negatively and the reason they're doing that is because of fear that these tariffs are going to cause a big economic slowdown that they're going to cause higher prices for consumers reduce consumer spending potentially lower the margins for big publicly traded companies and lower their income and ultimately uh lead to layoffs i think that's the fear but ultimately I would say that fear is good news for you as a potential home buyer or real estate investor who's been waiting on the sidelines a lot of the people who overextended themselves over the last three or four years during the pandemic are now running scared fear is gripping the market and many are starting to sell both their stocks and their houses in addition folks I want to show you what's going on in California's housing market now in California we're now up to 58,000 homes for sale through March 2025 that's the highest level of inventory in 6 years so a year ago we had still really low inventory in California not anymore and one area especially that's getting hit very hard is Washington DC in the District of Columbia we're now up to 2500 homes on the market that's over 60% higher than the long-term average for March uh I think at the same time we'll see more home sellers come to the market because a lot of people who own real estate in America everyone are baby boomers the baby boomer population owns tens and tens of millions of homes i mean they're they're the primary homeowners are the baby boomer population and the median home buyer age right now is about 52 years old and so it's the baby boomers who control the housing stock and it's also the baby boomers who control the stock market wealth about 80% of US stock market wealth is in the hands of baby boomers so what's going to happen to baby boomer mentality and psychology if stock prices continue to go down and we continue to see this bloodbath in the stock market it's going to cause a lot of retirement accounts to go down 401ks to go down and I think that's something that's going to lead to more baby boomers selling real estate many of them own second and third homes fourth and fifth investment properties there's over 24 million investorowned homes in America i am going to expect many of those homes to hit the market for sale over the next year on the US housing market as the level of uncertainty in the economy increases and as the odds of a recession go up the declines in values are going to spread not just from Texas and Florida and Arizona but into other states like Colorado Tennessee Georgia South Carolina North Carolina Nevada we're going to start to see home price declines spread across the US which is going to be good news for you guys this year but I want to also touch upon the long-term impacts here of tariffs because if we are truly in a new world order in terms of trade there's going to be a lot of shifts that happen but one thing I'm thinking in particular about is what are the geographic shifts in the US going to be in terms of which economies and cities and states will grow more in the future and which ones are going to contract and one very like interesting telltale sign here is just take a look at this map on Reventure app of where inventory on the housing market grew versus contracted over the last month the states in red are where housing inventory grew by a lot the states in blue are where it contracted and what I think is kind of funny is that if you isolate the states in blue where inventory went down it happens to be the states in the Midwest that would be best poised to gain from a new tariff initiative and of onshoring of jobs manufacturing growing again in America it would happen in states like Michigan Indiana Ohio Kentucky West Virginia Nebraska South Dakota and Oklahoma these would be the areas that would gain and we're already seeing actually housing inventory in these areas fall on a month-over-month basis indicating more buyer demand relative to listings and to take this a step further I want you guys to look at this map from Reddit it's the concentration of major auto manufacturing facilities in the US and where are these facilities concentrated it's basically in this north to south line basically concentrated in the Midwest and down through Tennessee Alabama and Mississippi as well as parts of South Carolina this is where all the auto manufacturing in America is so if hypothetically these tariffs bring more automanufacturing jobs back to the US and improve the demand for US-made vehicles over foreign vehicles these would be the parts of America here that benefit and that's just one example of how I think we're going to see varying geographic growth in response to these tariffs if in fact they do hold if we see these tariffs hold I think we're going to see varying geographic growth in the future it's going to have a big impact on which housing markets appreciate most in the future i would not be surprised if over the next 10 years the Midwest in America is actually the best performing housing market because today it's the cheapest place to buy a house places like Ohio and Indiana and Michigan it's the cheapest place to buy and it's the areas that stand to benefit most and if you guys want to stay on top of how the Trump tariffs are impacting your local housing market you need to go to Reventure app w.reventure.app and search your city or zip code and sign up for a premium plan so you can access our home price forecast score this score is an indication of where prices are going to head in your housing market over the next year it's ranked from 0 to 100 and below 50 is more of a buyer market you're going to want to know how your area is looking on this Reventure score because this market's getting volatile a premium plan on Reventure app is $39 a month or $399 a year ultimately a very affordable price for gaining peace of mind in your home buying or real estate investment decision process so head to ww.reventure.app right now and sign up for that premium plan so you can access our home price forecast for your city and zip code