Why We Need to Stop Blaming Housing Market Malaise on the Trade War with China

For many of us, “Made in China” was commonly found on the packaging of most of our toys as children. Electronics were “Made in Japan” until eventually those electronics were also made in China. A grandfather’s protest and objection to not “buying American” fell on our parents’ deaf ears as they looked to stretch budgets. As long as it was the coolest new toy, many of us did not seem to care where it came from.

Now, somehow, China (or at least the trade war ) seems to have manufactured some impact on the housing market. Some want us to believe if you flip over the big box of “Housing Market Malaise” it will read “Made in China.” No, Grandpa — not this time.

Blaming the trade war with China for the seeming lack of interest in home buying this spring just doesn’t cut it. Interest would be there — if there was product.

Much like those toys, manufacturing a house in the USA has a cost. Materials, regulatory requirements, and labor costs make it impractical to build houses most potential American homebuyers can afford. Mortgage interest rates are as low as one could hope. (That being a product of the trade war and its impact on the bond market.) Prices and gains are moderate.

Spring 2019’s malaise is the product of lack of inventory. Bare shelves in the starter home aisle are the reason more homes are not selling. Until we manage to bring more affordable homes to the market — homes that fit stretched budgets — this housing market malaise is “Made in America.”

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Kris Barros

Kris Barros is the Director of Corporate Communications at Embrace Home Loans. He always has his eye on the market and real estate industry in order to bring you the most up-to-date, relevant mortgage news.