The Real Cost of Tariffs, Trade, and Uncertainty — And Why It Hits Chicagoland First

When you hear the word “tariffs,” your first thought probably isn’t real estate. Maybe it’s politics, the news, or a debate between economists on cable TV.

But this week, I had a conversation that changed the way I think about that word — and I think it might do the same for you.

I sat down with Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors®. She’s someone I’ve followed for years — not just because she’s one of the leading voices in housing economics, but because she has a rare ability to connect the dots between big-picture trends and how they affect people like you and me.

We talked about how global trade, tariffs, interest rates, and foreign investment are all impacting the housing market — both across the U.S. and right here in Illinois.

And here’s what really hit home: Illinois is one of the most trade-exposed states in the country. According to Nadia, we rank third in imports and sixth in exports as a share of our local GDP. That’s not just an abstract statistic. It means that when the U.S. imposes new tariffs on steel, aluminum, or finished goods — or when global supply chains shift — we feel it faster and harder than most of the country.

For those of us in Chicagoland, it matters.

If you’ve wondered why it seems like fewer new homes are being built, or why prices for basic materials keep going up, or why mortgage rates keep wobbling, the answer is often found much farther away than your local builder or bank. As Nadia explained, tariffs are inflationary. They drive up the cost of materials, which gets passed down from developers to buyers — which means homes get more expensive and less accessible.

And here’s something else I hadn’t fully considered until we talked: uncertainty is just as damaging as the actual cost increases. Even the threat of tariffs or policy changes can cause developers to pause, investors to wait, and buyers to second-guess whether now is the right time to make a move. In a market that already feels unstable to so many people, that kind of hesitation only compounds the problem.

We also talked about mortgage rates, inventory levels, and why affordability — especially in places like Chicago — might become a more important asset than ever. While places like Florida and Arizona have seen massive price growth fueled by inbound migration, places like Chicagoland are still seen as a relative bargain — especially for buyers coming from the coasts or more overheated metros.

That said, it’s getting harder to find affordable entry points. Nadia told me that while inventory is up about 20% over last year, we’re still well below where we were pre-pandemic. So even though we’re seeing improvement, it’s not happening fast enough to relieve pressure for first-time buyers — especially those trying to stay near work, transit, or established communities.

If you know me, you know I’m not just interested in real estate as a transaction. I care deeply about how and where we live, and what shapes our neighborhoods over time. That’s why this conversation stood out to me. It connected things I already knew on the surface — mortgage rates, inventory, affordability — with a much larger story that most people don’t realize is unfolding in the background.

This is the kind of conversation that reminds me why I created The Chicagoland Guide in the first place — to explore not just the homes we buy and sell, but the forces shaping our region’s future.

If you’re interested in understanding where the market may be heading — or just want a clearer view of how global economics are impacting everyday decisions — I encourage you to take 30 minutes and listen.

🎧 Click here to hear the full episode with Nadia Evangelou

And if you want to read more of what sparked this conversation, you can check out Nadia’s article on Which States Rely Most on Imports and Exports via the National Association of Realtors®.

If this resonated with you, I hope you’ll forward it to a friend or neighbor. We’re all part of this ecosystem — and the more informed we are, the better decisions we can make about how to live, work, and grow in our communities.

More stories to come soon.

— Aaron