Supreme Court calls Trump tariffs unconstitutional. What now?

On Friday morning, the United States Supreme Court issued its ruling 6-3 verdict which has repealed most of President Trump’s sweeping tariffs, declaring them an illegal overreach of executive power.

At the same time, the Bureau of Economic Analysis announced GDP figures for the fourth quarter of 2025 It shows that the economy grew sluggishly at an annual rate of 1.4 percent – ​​a dramatic collapse from 4.4 percent in the third quarter – while the Federal Reserve’s favorite inflation gauge, the PCE index rose to 3 percent.

Three seismic events. One morning. And real estate professionals who don’t pay attention are about to be caught flat-footed.

Think of it this way: when a major earthquake hits, it’s not just the first quake that causes damage. It is the aftershocks that keep coming, sometimes for months, that shatter the foundations of things once thought stable. That’s where we are today.

The tariff ruling – and why it might not mean what you think

The Supreme Court’s decision invalidates the tariffs imposed under the International Economic Powers Emergency Act (IEEPA)covering reciprocal tariffs on dozens of countries and duties related to trade relations with Canada, China and Mexico. The government has already collected more than € $130 billion under these now illegal authorities, and companies are already demanding refunds.

Here, as an analyst, I have to put on the brakes and issue a warning: don’t assume that this statement changes everything overnight. The Trump administration has a well-documented pattern of resisting, delaying or circumventing court decisions it disagrees with. Officials have already done that have indicated that they will use other legal trading authorities to reintroduce many of the same tariffs through different legal mechanisms, such as executive order.

There is also a real question as to whether refunds will be processed efficiently – or processed at all – given the government’s track record of treating adverse judicial outcomes as obstacles to navigate rather than orders to follow.

As I always say, plan for the worst and hope for the best. It’s simply too early to know what full ripple effect this ruling will have on real estate. The legal fallout alone – with countries, industries and individual companies all lining up to pursue reimbursement claims – could create years of litigation and continued uncertainty.

That uncertainty could ultimately prove more damaging to builder and consumer confidence than the rates themselves.

If material costs eventually normalize as trade relations stabilize, new construction pricing could provide some relief. Lumber from Canada, steel and aluminum from multiple trading partners, appliances with components from China: all this drove up construction costs for more than a year. But don’t hold your breath waiting for that relief to appear soon at a price per square foot.

GDP: What 1.4% actually tells us

The Q4 2025 GDP figure of 1.4 percent wasn’t just a miss, it was a stunning one. Economists had predicted growth of about 3 percent. Much of the blame falls on the 43-day government shutdown late last year, which disrupted federal spending and laid off thousands of workers. Consumer spending, which makes up roughly two-thirds of the U.S. economy, slowed to the weakest pace in more than a year.

For real estate, consumer confidence is everything. When people feel economically insecure, they don’t make big financial decisions. They don’t buy houses. They don’t move. They don’t enlarge. They sit quietly and wait to see which way the wind blows, as we saw in January, home sales fell on a monthly and annual basis.

Sellers who were counting on motivated buyers in the spring of 2026 need to recalibrate their expectations. The buyer who was “almost ready” six months ago may have just backed out another six months.

Inflation: the problem that won’t end

Core PCE inflation was 3 percentabove the Federal Reserve’s 2 percent target and above expectations. The Fed is reluctant to aggressively cut rates in these circumstances, meaning mortgage rates remain stubbornly high. The 30-year fixed mortgage rate has been hovering well above 6 percent for months, and today’s numbers make it even less likely that the Fed will take action quickly.

This is the painful reality that agents must clearly communicate to clients: higher inflation, slower GDP growth, and higher mortgage rates coexisting are the economic scenario most damaging to real estate transaction volumes. It suppresses both supply and demand at the same time.

Sellers don’t want to advertise because they can’t afford to exchange their fixed low rate for a new rate. Buyers can’t afford to buy because the monthly payment calculation simply doesn’t work. The market isn’t freezing because people don’t want houses anymore; the market freezes because conditions make transactions virtually impossible.

What real estate professionals should do now

First, make yourself the most economically informed person your customers know. In times of uncertainty, people gravitate toward trusted advisors who can cut through the noise and provide clarity. If you don’t read the headlines, understand what they mean for your local market, and proactively communicate that understanding to those around you, someone else will fill that void.

Second, stop waiting for the market to save you. The agents who thrive in disrupted markets are those who build systems, not those who depend on favorable conditions. Now is the time to sharpen your offer presentations, strengthen your buyer consultation process and deepen your relationships with mortgage professionals who can help clients find creative financing solutions.

Third, help your customers find the opportunities within the uncertainty. Yes, the conditions are challenging. But challenging conditions also mean less competition for buyers ready to move and sellers priced to match. The buyers in today’s market are serious. The deals available to motivated sellers are real.

The real estate industry has survived recessions, financial crises, pandemic shutdowns and interest rate spikes. What separates the professionals who persevere from those who disappear is always the same: the commitment to being truly useful to the people they serve, regardless of what the market does.

Today’s economic earthquake will pass. The aftershocks – legal, political and financial – will continue for some time, and for exactly how long is anyone’s guess. Your job is to be the steady hand your clients need when the ground is still shaking.