In a surprising turn of events last week, a federal appellate court ruling challenged the legality of former President Trump’s emergency tariff powers—sending shockwaves through both the equity and bond markets. On the September 2 episode of The Jon Sanchez Show, host Jon Sanchez and co-hosts Dwight Millard (Highlands Mortgage) and Aaron Clark (Edge Realty) unpacked this ruling's unexpected impact on the housing market, posing a timely and thought-provoking question:
Could the reversal of tariffs derail the U.S. housing market?
The Legal Trigger: A Tariff Rollback in Question
On Friday, August 29, an appellate court struck down the continuation of President Trump’s tariffs, ruling that the administration had overstepped its emergency powers. While the headlines primarily focused on trade policy, financial markets quickly connected the dots—especially bond investors.
By the morning of Tuesday, September 2, the Dow was down over 600 points at its worst levels, and bond yields surged, raising concerns that mortgage rates could follow.
“We got a taste of what the market thinks if the Supreme Court ultimately shuts this down,” said Jon Sanchez during the broadcast.
The Tariff-to-Housing Chain Reaction
At first glance, tariffs might seem far removed from home prices or mortgage rates—but the relationship lies in the bond market.
Here’s the chain reaction:
- Tariff uncertainty triggers bond market volatility.
- Falling bond prices = Rising bond yields.
- Higher yields = Increased mortgage rates.
This type of market movement can spook buyers, reduce affordability, and pressure home sales.
“Of all the things that could move rates, this was not on the list,” Millard noted.
Mortgage Market Holds—for Now
Despite the jolt in yields, mortgage rates remained relatively stable by the end of the trading day on September 2. The 30-year fixed rate moved only slightly, closing at 6.53%, while the 15-year fixed rate settled at 5.88%, up just two basis points from the Friday prior.
“We dodged what could have been a much worse adjustment,” Millard added.
Still, the day’s events reminded everyone just how quickly uncertainty can ripple through the lending environment.
Buyer Sentiment: More Volatility, Less Confidence
Real estate broker Aaron Clark described growing buyer hesitation—fueled by headline-driven volatility.
“It feels like every time we think we’ve hit smooth air, something else shakes the plane. Buyers just want calm before they move,” Clark said.
According to Clark, buyers already in contract are generally staying the course. But new buyers? Many are hesitating—waiting to see what happens next.
Supreme Court in Play
Shortly after the ruling, President Trump announced an expedited appeal to the Supreme Court. By September 3, the Court agreed to hear the case far ahead of the October 14 deadline originally set by the appellate court.
While a decision has yet to be issued as of this writing (September 10), legal precedent appears to be in Trump’s favor. Of the 15 emergency applications he’s submitted to the Supreme Court since 2024, he’s won every single one.
If the Court sides with the administration, the tariffs may continue—and the housing market may stabilize. But if the Court strikes them down, financial markets could again be thrown into disarray.
What's at Stake?
- Tariff Refunds: If the tariffs are ruled unlawful, the federal government may be forced to refund billions to businesses—an administrative and fiscal headache.
- U.S. Credit Rating: Credit agencies have suggested that a reversal could even trigger a U.S. credit downgrade.
- Bond Market Turmoil: Unwinding the tariffs could fuel more bond volatility, translating to rising borrowing costs across the board.
“The shipping industry and trade brokers are already bracing for the worst,” Sanchez explained.
So—Could This Really Upend Housing?
Not directly, but the domino effect on rates and buyer sentiment could. The real concern isn’t the tariff itself—it’s how the market interprets legal and policy uncertainty.
- Higher yields → Higher mortgage rates → Reduced affordability.
- Confused buyers → Slower sales cycles → Inventory pressures.
- Financial market stress → Reduced consumer confidence.
“We’ve seen more concessions, more cautious buyers, and sellers under pressure to stay competitive,” Clark added.
What Should Homebuyers and Sellers Do Right Now?
Millard and Clark offered clear, level-headed advice on the show:
If You’re in Escrow:
- Consider locking your rate if you’re closing in the next 15–30 days. The risk/reward of waiting may not be worth it.
- Communicate closely with your loan officer and realtor to track developments.
If You’re Still Shopping:
- Be patient—but prepared. Waiting a few days or weeks may give you more clarity.
- Understand your numbers. Have rate scenarios modeled out so you can act quickly if needed.
“If you like what you have—lock it. Don’t gamble,” Millard emphasized.
Final Thoughts from Sanchez Gaunt
This episode serves as a clear reminder: in today's market, political and legal developments can move interest rates just as much as central bank policy. For investors and homeowners alike, staying informed is critical.
Whether or not the Supreme Court upholds the tariffs, the conversation around this ruling has highlighted just how connected global trade, credit markets, and housing have become.
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