Why home builder sentiment is in the dumps (hint: tariffs)

The National Association of Home Builders Housing Market Index rose slightly to 40 in April, indicating negative sentiment in the housing market. Rising material costs, averaging a 6.3% increase this year, add $10,900 to the average home's price. Home sales are at a six-year low, with homes staying on the market for an average of 1.5 months. While home price growth is slowing, this is unfavorable for builders. Increased mortgage rates, following a Treasury bond selloff, further dampen demand. Economic uncertainty and potential immigration crackdowns add to the challenges. Builders express concerns about escalating material costs and tariff risks. Federal trade policies are hindering efforts to alleviate the housing shortage. The current market conditions make starting new home projects risky. Less regulation was promised, but current policies are increasing construction difficulties.