4 ms·

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as

by shoo 1y ago

I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That said, it's curious that this CPI news release highlighted "shelter" as a driver: > The index for shelter rose 0.4 percent in August and was the largest factor in the all items monthly increase. The US may import a lot of things... but probably not shelter. Wonder how much of rent inflation is driven by fixed rate mortgages from the zirp era needing to be refinanced at today's higher mortgage rates.

tlogan 1y ago
My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?
- Aurornis 1y ago
  > Rents would go down because deportation of illegals will reduce demand The number of people deported is negligible. Around 200,000 people. Despite all the news and drama, this number isn’t actually very different than normal. Any large country will have a steady stream of deportations if they enforce immigration laws. It has been like this for a long time. Don’t believe the news and political rhetoric. Look at numbers. Do no trust any political claims without looking at the numbers.
  - Yoric 1y ago
    As far as I can tell from a distance (I live in Europe), it seems to be more violent than usual, though. Is that correct?
    - Aurornis 1y ago
      They are trying to make a big show of it with the masks and big public events, yes. It’s all political drama and it’s very sad that it’s like this.
- SR2Z 1y ago
  The "deportation of illegals" cannot reduce rents unless you think that undocumented workers are competing with Americans to pay $3k/mo rents in major cities, instead of living in RVs or cramming into small rooms. It can increase rents because immigrants build houses and do mental jobs like cleaning. > Could this be driven by the push to return to the office? A little. People still want to live in desirable areas for reasons other than work.
  - notmyjob 1y ago
    You cannot reduce rent period. Inflation is permanent typically, you can slow the rate of increase but prices don’t go back. Even massive building projects like the yimby’s lobby for can’t move the needle on housing costs according to economists who study the issue. If you are a renter in Silicon Valley you are absolutely competing with non-citizens who are paying 3k for 1 and 2 bedroom apartments. That’s why so many locals who were born there are now homeless or have had to leave. I can tell you the streets and neighborhoods where it’s almost 100% new (non-legal and low skill) residents. The rents in those neighborhoods are very much in the 2000-3000 range. Section is likely a factor but I don’t know that non-fully legal residents get section 8. It certainly wouldn’t surprise me if they did.
    - jghn 1y ago
      "non-citizens" and "undocumented workers" don't even come close to forming a circle in a Venn diagram.
      - notmyjob 1y ago
        I meant “undocumented workers” but didn’t want to offend people and don’t know that these “undocumented” people are actual workers. The phrase “undocumented worker” is, if not absurd newspeak, at these very least extremely imprecise: what documents, what work? Edit: here’s a thread on one such place, very much in the good, expensive side of town. (Studios go for about 3k in Campbell last I checked.) https://www.reddit.com/r/SanJose/comments/17acwq4/is_cadillac_drimpala_dr_really_that_dangerous/ https://www.reddit.com/r/SanJose/comments/17acwq4/is_cadilla... Many, though perhaps not most, of the non-citizens there are non-workers, unless you consider drug dealing gang members workers. They do have a stellar carniceria though, and it’s fairly safe during the day if you avoid eye contact with men and don’t wear certain colors.
- coldpie 1y ago
  > My naive expectation was: > - Rents would go down because deportation of illegals will reduce demand This was indeed extremely naive. There are not enough people in the US illegally to be a significant factor in housing demand. I'd suggest no longer getting information from whatever source lead you to believe this.
  - deleted 1y ago
    [deleted]
- jghn 1y ago
  > Rents would go down because deportation of illegals will reduce demand The fact that anyone would think this could possibly be true is an indicator of how strong the propaganda machine is.
- gdbsjjdn 1y ago
  > Rents would go down because deportation of illegals will reduce demand Genuinely curious because I've never heard someone state this quite so credulously. How many people do you think are in the country illegally, that they're moving the housing market in a substantial way? In my experience seasonal farm workers (both with status and without) are usually housed in what are essentially dorms. These buildings are borderline illegal from a building perspective and not housing supply you would compete for. Who are the millions of undocumented people renting a 2000/month 2 bedroom 1 bath condo?
  - ac29 1y ago
    > How many people do you think are in the country illegally Pew research said 14 million in 2023: https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-s-unauthorized-immigrant-population-reached-a-record-14-million-in-2023/ https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-...
- cloverich 1y ago
  Rents i naively think will follow new builds (low) and investor activity (high, and increasing). I expect any high ish demand area to see continued raising rents until they either build enough and / or kick out investors (but then, its far more complex compared to home purchases).
Aurornis 1y ago
> The US may import a lot of things... but probably not shelter. Housing requires construction materials, tools, and fixtures. Tariffs increase the cost of all of these, including domestically produced materials due to the second order effects.
- ACCount37 1y ago
  It also requires human labor, which isn't impacted by tariffs directly, but may be impacted by other government actions in the US. Such as the ongoing high profile crackdown on illegal immigrant labor.
  - Aurornis 1y ago
    Look at the actual deportation numbers. It’s barely on track to meet deportation rates from a decade ago. Don’t believe the political rhetoric. They’re making a big show and behaving poorly with the masks and other abuses, but they’re not actually doing abnormally high deportations. Note that any large country will have a steady flow of deportations due to basic enforcement of immigration laws.
    - throwawaysleep 1y ago
      Crackdown != deportations. If workers stay away from job sites, the labor is off the market even if they don’t leave the country.
    - helsinki8 1y ago
      Deportation numbers can be highly misleading because of changes in how border interactions were recorded. There have been changes at various times to count as a deportation turning someone back at the border, or to count it as a refusal of entry. Deporting 100 people working at a factory has a different economic impact than deporting 100 people at the moment they were trying to cross the border.
    - Workaccount2 1y ago
      The goal for them is to scare immigrants out of the country, make a spectacle of deporting 10 and hope another 20 get scared and self-deport, and another 100 decide not to try and illegally enter.
Yoric 1y ago
There have been talks of collusion/price-fixing/monopoly abuse on rents in the US, with a single company (I don't remember the name) providing services (including picking prices) to a large majority of landlords. Could this be related?
- baby-yoda 1y ago
  The company accused of being involved in collusion is RealPage, they have a local market analytics platform which shares rental information between landlords. https://www.justice.gov/archives/opa/pr/justice-department-sues-six-large-landlords-algorithmic-pricing-scheme-harms-millions https://www.justice.gov/archives/opa/pr/justice-department-s...
blensor 1y ago
I heard that too, and it kinda makes sense, but what I also heard is that this one time price increase may not come all at once but drawn out over a longer period because some industries will eat the tariffs longer than others. So instead of a massive inflation bump in one month you may get a sustained inflation rise over 6-12 months for example, which from the consumers POV probably looks just like higher inflation overall
throw0101d 1y ago
> I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That assums tariffs are consistent. How consistent has the administration been on tariff rates?
themaninthedark 1y ago
This is interesting to see for me because my local housing market(which was once one of the hottest in the US) looks to be on the decline. Houses are on market longer, prices are dropping and sellers are making lots of concessions.
9rx 1y ago
> an argument is that tariffs should lead to higher prices for US consumers At the same time, though, prices can never rise higher than the consumer is willing to pay. All else equal that ultimately needs to be true, but there are many variables that do not need to remain equal, so it is not a foregone conclusion. The 2022 food crisis offered pretty good motivation for consumers to pay more — people were truly worried about going hungry there for a while, albeit thankfully that concern didn't last long. I'm not sure tariffs offer the same kind of motivation. I expect there is a strong "Haha. No. I'm not paying more for this arbitrary reason that can be (and probably will be) reversed on a whim." sentiment out there right now.
- skeezyboy 1y ago
  > At the same time, though, prices can never rise higher than the consumer is willing to pay. ahhh, the naivety of youth. not only can they, they have.
  - 9rx 1y ago
    No. Can't happen. Saying "I will sell you this widget for no less than one billion dollars!" doesn't establish a price. Price is not determined until a voluntary transition takes place. And a voluntary transaction fundamentally cannot take place without a buyer willing to pay the transacted price. As we saw in 2022, fear of starvation is a pretty strong motivator to see consumers wanting to pay more to secure their spot in line. A random dude who likes to draw nude art for his friend saying everyone should pay more because of, uh, reasons... Not so much. That's not to say that sentiment cannot change, but without strong motivation there is no reason for it to happen any time soon.
    - skeezyboy 1y ago
      > Price is not determined until a voluntary transition takes place youre talking about market value. price is definitely set before the transaction takes place. you can set the price at whatever you like.
      - 1y ago
ProjectArcturis 1y ago
House prices actually have nothing to do with CPI. "Shelter" is calculated using "Owners Equivalent Rent": https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
- jagraff 1y ago
  I think, all things being equal, higher home prices should lead to higher rents, since at the margin people on the verge of buying a home would be more likely to choose to keep renting when prices are higher, thus increasing demand for rental units.
tlogan 1y ago
I have a theory about why rents are rising faster than everything else: all those companies that bought up houses for cash are finally trying to make real money off them. And they’ll keep doing it, since calling that out isn’t politically beneficial.

by shoo 1y ago

tlogan 1y ago

My naive expectation was: - Rents would go down because deportation of illegals will reduce demand - Prices of goods would skyrocket because of tariffs But instead, rents went way up. Could this be driven by the push to return to the office?

Aurornis 1y ago
> Rents would go down because deportation of illegals will reduce demand The number of people deported is negligible. Around 200,000 people. Despite all the news and drama, this number isn’t actually very different than normal. Any large country will have a steady stream of deportations if they enforce immigration laws. It has been like this for a long time. Don’t believe the news and political rhetoric. Look at numbers. Do no trust any political claims without looking at the numbers.
- Yoric 1y ago
  As far as I can tell from a distance (I live in Europe), it seems to be more violent than usual, though. Is that correct?
  - Aurornis 1y ago
    They are trying to make a big show of it with the masks and big public events, yes. It’s all political drama and it’s very sad that it’s like this.
SR2Z 1y ago
The "deportation of illegals" cannot reduce rents unless you think that undocumented workers are competing with Americans to pay $3k/mo rents in major cities, instead of living in RVs or cramming into small rooms. It can increase rents because immigrants build houses and do mental jobs like cleaning. > Could this be driven by the push to return to the office? A little. People still want to live in desirable areas for reasons other than work.
- notmyjob 1y ago
  You cannot reduce rent period. Inflation is permanent typically, you can slow the rate of increase but prices don’t go back. Even massive building projects like the yimby’s lobby for can’t move the needle on housing costs according to economists who study the issue. If you are a renter in Silicon Valley you are absolutely competing with non-citizens who are paying 3k for 1 and 2 bedroom apartments. That’s why so many locals who were born there are now homeless or have had to leave. I can tell you the streets and neighborhoods where it’s almost 100% new (non-legal and low skill) residents. The rents in those neighborhoods are very much in the 2000-3000 range. Section is likely a factor but I don’t know that non-fully legal residents get section 8. It certainly wouldn’t surprise me if they did.
  - jghn 1y ago
    "non-citizens" and "undocumented workers" don't even come close to forming a circle in a Venn diagram.
    - notmyjob 1y ago
      I meant “undocumented workers” but didn’t want to offend people and don’t know that these “undocumented” people are actual workers. The phrase “undocumented worker” is, if not absurd newspeak, at these very least extremely imprecise: what documents, what work? Edit: here’s a thread on one such place, very much in the good, expensive side of town. (Studios go for about 3k in Campbell last I checked.) https://www.reddit.com/r/SanJose/comments/17acwq4/is_cadillac_drimpala_dr_really_that_dangerous/ https://www.reddit.com/r/SanJose/comments/17acwq4/is_cadilla... Many, though perhaps not most, of the non-citizens there are non-workers, unless you consider drug dealing gang members workers. They do have a stellar carniceria though, and it’s fairly safe during the day if you avoid eye contact with men and don’t wear certain colors.
coldpie 1y ago
> My naive expectation was: > - Rents would go down because deportation of illegals will reduce demand This was indeed extremely naive. There are not enough people in the US illegally to be a significant factor in housing demand. I'd suggest no longer getting information from whatever source lead you to believe this.
- deleted 1y ago
  [deleted]
jghn 1y ago
> Rents would go down because deportation of illegals will reduce demand The fact that anyone would think this could possibly be true is an indicator of how strong the propaganda machine is.
gdbsjjdn 1y ago
> Rents would go down because deportation of illegals will reduce demand Genuinely curious because I've never heard someone state this quite so credulously. How many people do you think are in the country illegally, that they're moving the housing market in a substantial way? In my experience seasonal farm workers (both with status and without) are usually housed in what are essentially dorms. These buildings are borderline illegal from a building perspective and not housing supply you would compete for. Who are the millions of undocumented people renting a 2000/month 2 bedroom 1 bath condo?
- ac29 1y ago
  > How many people do you think are in the country illegally Pew research said 14 million in 2023: https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-s-unauthorized-immigrant-population-reached-a-record-14-million-in-2023/ https://www.pewresearch.org/race-and-ethnicity/2025/08/21/u-...
cloverich 1y ago
Rents i naively think will follow new builds (low) and investor activity (high, and increasing). I expect any high ish demand area to see continued raising rents until they either build enough and / or kick out investors (but then, its far more complex compared to home purchases).

Aurornis 1y ago

> The US may import a lot of things... but probably not shelter. Housing requires construction materials, tools, and fixtures. Tariffs increase the cost of all of these, including domestically produced materials due to the second order effects.

ACCount37 1y ago
It also requires human labor, which isn't impacted by tariffs directly, but may be impacted by other government actions in the US. Such as the ongoing high profile crackdown on illegal immigrant labor.
- Aurornis 1y ago
  Look at the actual deportation numbers. It’s barely on track to meet deportation rates from a decade ago. Don’t believe the political rhetoric. They’re making a big show and behaving poorly with the masks and other abuses, but they’re not actually doing abnormally high deportations. Note that any large country will have a steady flow of deportations due to basic enforcement of immigration laws.
  - throwawaysleep 1y ago
    Crackdown != deportations. If workers stay away from job sites, the labor is off the market even if they don’t leave the country.
  - helsinki8 1y ago
    Deportation numbers can be highly misleading because of changes in how border interactions were recorded. There have been changes at various times to count as a deportation turning someone back at the border, or to count it as a refusal of entry. Deporting 100 people working at a factory has a different economic impact than deporting 100 people at the moment they were trying to cross the border.
  - Workaccount2 1y ago
    The goal for them is to scare immigrants out of the country, make a spectacle of deporting 10 and hope another 20 get scared and self-deport, and another 100 decide not to try and illegally enter.

Yoric 1y ago

There have been talks of collusion/price-fixing/monopoly abuse on rents in the US, with a single company (I don't remember the name) providing services (including picking prices) to a large majority of landlords. Could this be related?

baby-yoda 1y ago
The company accused of being involved in collusion is RealPage, they have a local market analytics platform which shares rental information between landlords. https://www.justice.gov/archives/opa/pr/justice-department-sues-six-large-landlords-algorithmic-pricing-scheme-harms-millions https://www.justice.gov/archives/opa/pr/justice-department-s...

blensor 1y ago

I heard that too, and it kinda makes sense, but what I also heard is that this one time price increase may not come all at once but drawn out over a longer period because some industries will eat the tariffs longer than others. So instead of a massive inflation bump in one month you may get a sustained inflation rise over 6-12 months for example, which from the consumers POV probably looks just like higher inflation overall

throw0101d 1y ago

> I've heard a few economists interviewed about the estimated impact of tariffs, an argument is that tariffs should lead to higher prices for US consumers, but as a one-time price increase, not a sustained level of price inflation. That assums tariffs are consistent. How consistent has the administration been on tariff rates?

themaninthedark 1y ago

This is interesting to see for me because my local housing market(which was once one of the hottest in the US) looks to be on the decline. Houses are on market longer, prices are dropping and sellers are making lots of concessions.

9rx 1y ago

> an argument is that tariffs should lead to higher prices for US consumers At the same time, though, prices can never rise higher than the consumer is willing to pay. All else equal that ultimately needs to be true, but there are many variables that do not need to remain equal, so it is not a foregone conclusion. The 2022 food crisis offered pretty good motivation for consumers to pay more — people were truly worried about going hungry there for a while, albeit thankfully that concern didn't last long. I'm not sure tariffs offer the same kind of motivation. I expect there is a strong "Haha. No. I'm not paying more for this arbitrary reason that can be (and probably will be) reversed on a whim." sentiment out there right now.

skeezyboy 1y ago
> At the same time, though, prices can never rise higher than the consumer is willing to pay. ahhh, the naivety of youth. not only can they, they have.
- 9rx 1y ago
  No. Can't happen. Saying "I will sell you this widget for no less than one billion dollars!" doesn't establish a price. Price is not determined until a voluntary transition takes place. And a voluntary transaction fundamentally cannot take place without a buyer willing to pay the transacted price. As we saw in 2022, fear of starvation is a pretty strong motivator to see consumers wanting to pay more to secure their spot in line. A random dude who likes to draw nude art for his friend saying everyone should pay more because of, uh, reasons... Not so much. That's not to say that sentiment cannot change, but without strong motivation there is no reason for it to happen any time soon.
  - skeezyboy 1y ago
    > Price is not determined until a voluntary transition takes place youre talking about market value. price is definitely set before the transaction takes place. you can set the price at whatever you like.
    - 1y ago

ProjectArcturis 1y ago

House prices actually have nothing to do with CPI. "Shelter" is calculated using "Owners Equivalent Rent": https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

jagraff 1y ago
I think, all things being equal, higher home prices should lead to higher rents, since at the margin people on the verge of buying a home would be more likely to choose to keep renting when prices are higher, thus increasing demand for rental units.

tlogan 1y ago

I have a theory about why rents are rising faster than everything else: all those companies that bought up houses for cash are finally trying to make real money off them. And they’ll keep doing it, since calling that out isn’t politically beneficial.