With uncertainty surrounding tariffs and other costs associated with single-family homes, builder sentiment fell in February
Feb. 19, 2025
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Home builder sentiment is on the decline as ongoing uncertainties of tariffs hang in the background.
With many uncertainties in the housing market, builder confidence dropped in February. According to the National Association of Home Builders’ Eye On Housing blog, the NAHB/Wells Fargo Housing Market Index fell to 42, its lowest level in five months. All key components of the index declined, with current sales conditions dropping to 46, future sales expectations dropping to 46, and buyer traffic slipping to 29. This is likely due to ongoing concerns surrounding costs as both mortgage rates and tariffs remain a point of contention for many home builders.
“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,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023. Incentive use may also be weakening as a sales strategy as elevated interest rates reduce the pool of eligible home buyers.”Read more
