Jonathan and Drew Scott, best known as the Property Brothers, have issued a warning about the housing market next year.
The twin brothers, who made their fortune with dozens of HGTV shows about property, have said they are concerned about Trump’s tariff threats.
The president-elect recently revealed he plans to introduce tariffs on goods coming from Mexico and Canada when he takes office, if the countries don’t stem the flow of migrants and drugs across their borders with the US.
‘Jonathan and I love the idea of domestic-made products,’ Drew Scott, the real estate agent of the duo, told Bloomberg.
However the pair are worried that tariffs will raise the cost of foreign-produced building materials like steel and lumber, they revealed to Bloomberg.
‘There is a balance we need to strike. Blanket tariffs are not good for any economy’ Jonathan, who is the head of products for the brothers $2.8 billion home goods brand empire.
Drew told Bloomberg that 2025 is not the time to be flipping houses because of high interest rates and rising material costs.
Many homeowners are avoiding moving and having to take out a new mortgage at a higher rate.
The Property Brothers have issued a warning about the housing market next year
However, the brothers aren’t worried about their own business interests even in a property downturn.
‘We’ve made money in every kind of market possible,’ Drew told Bloomberg.
‘Up markets, down markets, buyer’s, seller’s markets, it doesn’t matter.’
The pair also warned that 2025 is not the year to be doing a large home renovation.
Many are putting off extensive home renovations that would require taking out a home equity line of credit at a high rate.
In response the Property Brothers are working on a new show that will focus more on modest rather than aspirational renovations, Bloomberg reports.
‘Full-scale renovations, are not realistic for everyone,’ Drew told the publication.
While mortgage rates have come down from their post-pandemic highs as the Fed cuts its base rate they remain at an average of 6.44 percent for a 30-year fixed mortgage.
However, one expert predicts they need to fall below 6 percent to kickstart the frozen housing market.
The housing market is frozen with homeowners putting off moving until mortgage rates fall
The ‘Oracle of Wall Street’ Meredith Whitney recently claimed that once rates are within the 5 percent field buyers tend to feel encouraged that it is worth taking the plunge.
Whitney, who earned her nickname after predicting the global financial crisis, said house prices must also drop by a tenth in order to make any material difference in affordability.
Decades-high mortgage rates and record house prices mean the average payment on a home loan this year is double what it was in 2000, she said.
‘If mortgage rates go below 6 percent, you will see a spike in both home equity originations as well as home sales,’ she told DailyMail.com.
‘When volume starts to hit the market, prices will go down, and the cycle will be self perpetuating.’
Over the last several years, the housing market has become increasingly unaffordable for millions of Americans.
Since 2020, mortgage rates have more than doubled, Whitney said, and median home prices have increased by 33 percent.
