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U.S. Homebuilders Warn Tariffs Could Worsen Housing Crisis; Markets Gain After Trump Halts Most Tariffs For 90 Days; Rubio: U.S. Citizen Freed From Russia, En Route To U.S. Aired 5:30-6a ET

Aired April 10, 2025 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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STEFANO POZZEBON, CNN CONTRIBUTOR (voiceover): Stefano Pozzebon, CNN, Santo Domingo.

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POLO SANDOVAL, CNN ANCHOR: Yeah. New Yorkers here, especially of Dominican descent, certainly standing in solidarity with so many people that are going through so much. So our thanks to Stefano.

Well, meanwhile, U.S. officials telling CNN that the Trump administration is preparing to send more migrants with criminal records to El Salvador's notorious mega prison. And this comes after the Supreme Court ruled to allow President Donald Trump to continue using a wartime authority for deportations but added that migrants must be given adequate notice to challenge their deportations.

Now this has spurred lawsuits in some parts of the U.S. For example, on Wednesday, federal judges in New York and in Texas issued orders to temporarily halt the deportation of Venezuelan plaintiffs.

All right. Still to come here on EARLY START, what will Trump's tariffs do to the U.S.' housing market? We're going to pose that question to an expert on the other side of the break.

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SANDOVAL: All right, let's start with some potential positives. President Trump's 90-day pause on reciprocal tariff -- tariffs may have relieved the pressure on the U.S. housing market at least just a little bit, but it's still facing widespread uncertainty.

Thirty percent of softwood lumber, which is critical for building homes, is actually imported into the United States. And homebuilders are warning that tariffs and charges on lumber and other materials that are used to build homes -- they could make the housing affordability crisis even worse.

There's nothing like a balance of some maybe good, promising, and some concerning news here.

Let's get now to Joel Berner, senior economist at realtor.com joining us live from Austin, Texas. Joel, good to have a fellow Texan on this morning.

JOEL BERNER, SENIOR ECONOMIST, REALTOR.COM: Good morning, Polo. Thank you for having me.

SANDOVAL: So, hey, before we dive into tariffs let's talk a little bit about consumer sentiments when it comes to the housing markets. We know it evolves. Some would say it devolves as well, especially with the economic uncertainty right now.

So just give us the pulse of the people in some of the studies that you've analyzed. Where do consumers stand right now in terms of their biggest worries?

BERNER: We're in a pretty rocky spot right here, Polo, and that's before a lot of the uncertainty that came from the tariff announcement.

If you look at the Fannie Mae Home Purchase Sentiment Index from March, which was just all before the April 2 tariff announcement, we saw a huge spike in people who were afraid that they were going to lose their jobs in the next 12 months. And this is a survey of people who are potentially in the market to buy a home. And so this sentiment is really tough for the home -- for the housing industry because it shows that there's a lack of confidence in people's employment.

And what we k now about the housing market is that when the labor market does well the housing market does well. So if there's some trepidation on the labor market, we're going to see that makes its way into the housing market soon.

SANDOVAL: And if you could, just take a closer look at the core, I think, of some of those statistics. Is it simply that people perhaps don't feel comfortable paying more of their mortgage, more into their escrow payments? How does that -- how does that happen? How does that trickle down?

BERNER: I think people have been discouraged by mortgage rates for a really long time. They're looking around trying to make a purchase and seeing that a home that meets their needs doesn't really fit their budget just because of the high cost of financing a home purchase.

And this disproportionately affects first-time homebuyers whereas someone who already owns a home has some equity that they can convert into a downpayment. First-time homebuyers end up mortgaging most of their payment and at these high six-low seven percent mortgage rates it's really tough to do. It becomes really expensive.

So I think that's really what's gumming the gears of the housing market right now and it looks like some mortgage rates are going to stay about where they are.

SANDOVAL: All right, so let's talk tariffs now. We touched on them a little bit right now when it comes to some of the material or the cost purchasing some of the material to build a home.

Where do you see some of the biggest and most immediate impacts because of these -- this global trade war?

BERNER: Yeah. I think tariffs affect the housing market in three different ways.

One of them is direct, right? Just the cost of construction inputs. We get a lot of lumber from Canada and a lot of drywall materials from Mexico and China. And so we have a dependence on the rest of the world when it comes to homebuilding. And if the cost of these inputs goes up, then the cost of a new home goes up and that gets passed along to consumers.

And then there are a couple of indirect effects, too.

Tariffs will indirectly affect mortgage rates because of how they have an effect on the markets, and they'll indirectly effect consumer sentiment, like we were just talking about where if we're looking around and saying my company doesn't have the same level of international business that it did before because of these tariffs and I'm a little worried about losing my job, I'm probably not going to invest in a new home right now.

So the way that it affects mortgage rates and the way that it affects consumer sentiment are some indirect ways that these tariffs are having an effect on the housing market as well.

SANDOVAL: No, it's such an important conversation to have. We've talked about the consumer goods and what we use every day but it's important to remember also where we live. Our homes do stand to be impacted and our mortgage rates, as you point out.

So, Joel Berner, we really appreciate this insight. Thank you so much for taking the time.

BERNER: Absolutely, Polo. Have a good one.

SANDOVAL: You do the same.

All right. Still ahead, U.S. investors breathing a sigh of relief after the president reverses course on his reciprocal tariffs. More on that top story coming up.

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Also, Lebanon (sic) is getting some -- shall we say some energy. How the basketball legend is making history once again.

We'll be right back.

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SANDOVAL: And welcome back. I'm Polo Sandoval in New York. And here are some of the stories that we're watching today. U.S. Secretary of State Marco Rubio says that a Russian American woman is headed back to the United States after being released from prison in Russia. Ksenia Karelina was serving a 12-year prison sentence for treason after making a donation of just of $50.00 U.S. dollars to a charity supporting Ukraine. Her lawyers say that she was part of a prisoner swap but still not word on who she was exchanged for.

[05:45:05]

Donald Trump says that he's ordered a 90-day pause on his reciprocal tariffs except for China. The country will now see tariff rates rise to a whopping 125 percent as the U.S. president ratchets up his trade war with Beijing. The move is meant to put pressure on China, according to the administration, hoping that they'll come to the negotiating table.

And temperatures will soar 10 to 25 degrees above normal on the West Coast of the United States this week. High temperatures could possibly break records for many places today, tomorrow, and into the weekend. On the East Coast you see some potential rain there happening where temperatures will also remain below normal in the coming days. More than 50 million people are under frost advisories in April.

All right. President Donald Trump backing down significantly but not entirely in his dizzying trade war fight.

Take a look now at how the Dow reacted to the news of the pause on tariffs. You see basically the changes here and how you immediately notice that uptick. You see the arrow on the lower left hand corner of your screen there flip red. Losses and green gains in early trading were reported. And then all of a sudden you see that Dow going significantly up, leading up to Wall Street's best day in 16 years.

Let's get now more from CNN's Jeff Zeleny who is in Washington.

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JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: President Trump reversing course on Wednesday in dramatic fashion. His sweeping tariff policy revealed one thing above all else -- his threshold for political pain was one week. After day after day after his advisers and the president himself has said he would not put a pause on this sweeping tariff plan that is exactly what he did.

And it sent the financial markets soaring, of course, after they have been falling for day after day for nearly a week's time.

The president, as we asked him in the South Lawn of the White House, explained it like this.

Can you walk us through your thinking about why you have decided to put a 90-day pause?

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: Well, I thought that people were jumping a little bit out of line. They were getting yippy, you know? They were getting a little bit yippy, a little bit afraid. ZELENY: You said that these tariffs would go in effect on Monday, and you said no pause. Today there is a pause. So can people believe your word today?

TRUMP: No. I think people have to have -- yeah, it's not a question of that. You have to have flexibility. I could say here's a wall and I'm going to go through that wall. I'm going to go through it no matter what and keep going, and you can't go through the wall. Sometimes you have to be able to go under the wall, around the wall, or over the wall.

ZELENY: But we're learning there actually was a growing alarm inside the Treasury Department and, indeed, here at the White House about the bond markets, the weakening of the dollar. So that is one of the many things the president acknowledged led him to put a pause on tariffs until July, except China.

The trade war with China is still very much underway. The percentage is now at 125 percent for China goods coming here to the U.S. Now the question is when will that end? Will it end? Who will blink first? The president asked directly about that. He said he believes China wants to make a deal. There has been zero indication from President Xi that he is willing to blink.

So the bottom line here is the U.S. now and China in a trade war even as other countries are hit with a 10 percent tariff as the market, still rattled, now recovers.

Jeff Zeleny, CNN, the White House.

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SANDOVAL: U.S. House Speaker Mike Johnson has delayed a key vote on a budget bill until later today as Republicans continue to feud over spending cuts in the legislation. GOP leaders failed to convince holdouts to vote for the bill on Wednesday despite a push from President Trump himself. Some lawmakers -- they are demanding deeper spending cuts and say that the bill is simply not viable in its current form.

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REP. CHIP ROY (R-TX): They haven't put any guardrails on their budget and yet they've done a one-way ratchet on taxes. So they were fine saying that they'll unlimited tax cuts but they're unwilling to say that they'll do spending cuts, which is phony math.

REP. ANDY BIGGS (R-AZ): Their plan is unserious I think is the bottom line. We've got a $2.25 trillion a year structural deficit that needs to be addressed and they're not really addressing that.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Are you going to vote for the budget resolution today?

REP. TIM BURCHETT (R-TN): Not currently as it's drafted, no. I have some concerns about the spending. I don't know why we're bringing it up for a vote right now. It clearly doesn't have the votes.

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SANDOVAL: Now, the bill is a key part of the president's agenda. But House Democratic leader Hakeem Jeffries slamming the GOP, saying that Republicans are fighting with each other and "not working for the American people."

Not in Congress.

All right. So a quick programming note. Former U.S. Treasury secretary Janet Yellen will join CNN's "ONE WORLD" today to talk about President Trump's trade war. That's at 11:00 a.m. in New York, 4:00 p.m. for our viewers in London.

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ANNOUNCER: This is CNN breaking news.

SANDOVAL: All right, let's now go back to the breaking news that we brought you earlier.

U.S. Secretary of State Marco Rubio says that a Russian American woman is headed back to the United States after being released from a prison in Russia.

For the latest now let's go to CNN international diplomatic editor Nic Robertson joining us live from London. Nic, tell us a little bit more about who this woman is and who the U.S. may receive in return.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah. Ksenia Karelina is the name of the woman. She lives in California -- a Russian American in her early 30s. An amateur ballerina is how she has been described.

She'd gone home to visit family in Russia at the end of 2023-early 2024 for the holidays -- Yekaterinburg. It's about 900 miles east of Moscow. She'd gone there to visit family.

But when she went back the Russians detained her on her arrival and then later in August of last year charged her with treason. Why? Because she donated around $50.00 while she was in the United States -- around $50.00 to a Ukrainian support charity showing -- it indicated to the Russians, at least, who she was supporting Ukraine in this war that Russia doesn't call a war. And they charged her with treason and gave her 12 years in jail. Wrongfully detained is how Marco Rubio is describing her detention in Russia.

In terms of threat level to Russia, clearly not a huge threat but clearly, a strong message sent by Russia that anyone that supports Ukraine in any way -- any Russian they think that supports Ukraine should be punished for that. Punished for treason.

Undoubtedly, relief for everyone that knows her and for her family that she's now out of jail. She was facing 12 years in the Russian penal system. It's not clear yet who she's been exchanged for. It would be expected

that this would happen in an exchange. It comes on a day when U.S. and Russian officials are meeting in Istanbul to kind of hammer out a better diplomatic relationship. How to work their embassy situations. They've both, you know, expelled embassy employees over the past several years as relations deteriorated subsequent to Russia illegally invading Ukraine in 2022.

So this appears to be a confidence-building measure in a step to improving Kremlin and White House relations despite the fact the war is going on, despite the fact that President Trump just a couple of days ago criticized Russia for its heavy bombing and killing of Ukrainian civilians, despite the fact that President Trump is pushing a peace deal that Ukraine has signed up to that Russia has yet to unconditional let Ukraine move along with.

So who the exchange is with not clear, but for Ksenia this is huge. She's on her way home.

SANDOVAL: Yeah.

ROBERTSON: On her way to the people that love her and freedom that she might not have had for over a decade.

SANDOVAL: I'm still trying to wrap my head around a $50.00 donation in the U.S. resulting in a 12-year prison sentence in Russia. But as you point out, fortunately, the family now breathing a sigh of relief.

Nic Robertson, thank you for walking us through all that. Appreciate you.

We'll be right back.

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(BEGIN VIDEO CLIP)

CELINE DION, CANADIAN SINGER-SONGWRITER: Singing "My Heart Will Go On."

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SANDOVAL: Good luck getting that out of your head the rest of today.

Celine Dion's heart will indeed go on and those lyrics -- they will be preserved for eternity. The 1997 smash hit from the Canadian singer- songwriter will soon be part of the National Recording Registry at the U.S.' Library of Congress. It's one of 25 newly inducted recordings. Now, they do have to be at least 10 years old and considered cultural, historically, and potentially aesthetically significant.

Other registering newcomers include Elton John's 1973 album "Goodbye Yellow Brick Road" and Amy Winehouse's "Back to Black." Also the "Hamilton" Broadway cast album and songs like the Minecraft videogame soundtrack can also make the cut.

Nominations for next year's list -- they are being accepted at the Library of Congress' website until October, so feel free to nominate.

Britain's King Charles and Queen Camilla stopping by the Vatican to visit Pope Francis yesterday during their trip to Italy. The royal family releasing this picture you're seeing here. The Vatican says that Pope Francis expressed his good wishes to the king and queen as well on the occasion of the wedding anniversary and also wished his majesty a speedy recovery of his health.

Time for your sports break.

Keegan Bradley hitting an ace there at the Augusta National course during yesterday's fun par 3 contest as golfers are set to tee off in about two hours at the Masters. It's the first major of the season.

Scottie Scheffler is seeking his third green jacket. He's the world number one player and also the defending champ at the Augusta course in Georgia. Others to watch include four-time major winner Rory McIlroy who is seeking his first Masters win for a career grand slam.

And basketball legend LeBron James -- he is making history again but this time off the court. He is the first pro male athlete to join the Barbie universe and have his likeness depicted as a Ken doll, headphones and all.

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