Builder confidence in the market for newly-built single-family homes fell to 42 in February, down five points from January and the lowest level in five months, according to the National Association of Home Builders /Wells Fargo Housing Market Index.
NAHB attributed the sharp fall to concerns about tariffs, elevated mortgage rates and high housing costs.
“With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has builders further concerned about costs,” NAHB Chief Economist Robert Dietz said in a statement. “Reflecting this outlook, builder responses collected prior to a pause for the proposed tariffs on goods from Canada and Mexico yielded a lower HMI reading of 38, while those collected after the announced one-month pause produced a score of 44.”
“While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI,” NAHB Chairman Carl Harris said in a statement. “Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023.”
The HMI survey revealed 26% of builders cut home prices in February, down from 30% in January and the lowest share since May 2024.
Index levels below 50 indicate more builders view market conditions as “poor” than “good.”
Read the full report here.
