Will Interest Rates Drop Because of Trump's Tariffs? Here's What Buyers & Sellers Need to Know

The 2025 real estate market just got a major shakeup. With President Trump announcing sweeping new tariffs on imported goods—and the stock market reacting with one of its worst days in years—many buyers and sellers are asking the same thing:
Will interest rates finally come down?

The answer? Maybe—but it’s complicated. Let’s break it down.

What Just Happened?

In early April, Trump rolled out what he’s calling “Liberation Day” tariffs:

• 10% on nearly all imported goods

• 34% on Chinese imports

• Targeted increases on EU and Mexico

The market didn’t take it lightly. The S&P 500, Nasdaq, and Dow all tumbled, and investor confidence shook.

Now, all eyes are on the Federal Reserve.

Could This Lead to Lower Interest Rates?

Possibly. Here’s why:

• Traders are betting on it. Wall Street is now expecting the Fed to start cutting rates as early as June 2025, to calm the markets and support growth.

• Economic growth could slow. Tariffs make goods more expensive, which can hurt businesses and consumers—slowing the economy overall. That usually prompts the Fed to lower rates.

• But inflation is the wild card. These same tariffs will likely push prices up, especially for everyday goods. If inflation rises above 4% (as some analysts predict), the Fed may hesitate to cut rates.

What This Means for Buyers & Sellers in Charleston

For Buyers:

• If rates do drop, you could score a better mortgage rate—but timing is everything.

• If inflation kicks in first, home prices and borrowing costs might rise before rates fall.

• My advice: Get pre-approved now and stay flexible. If you find the right home, it may still be worth locking in.

For Sellers:

• Buyers may become more cautious in the short term.

• If rates drop later this year, you could see demand rise again—but now is a great time to stand out with proper pricing and presentation.

• A strong marketing strategy (and agent!) is key in an unpredictable climate.

The Bottom Line:

We’re in a moment of economic tension—and opportunity. Rates could drop. Inflation could rise. The best strategy? Stay informed, be prepared, and lean on someone who’s watching the market day by day.

If you’re wondering how this all affects your plans, let’s chat.
I’m offering free 15-minute strategy sessions for buyers, sellers, and investors who want to make smart moves in 2025.

Reach out at hello@lemonlaneliving.com or visit lemonlanehome.com to book.