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3 hours ago
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President Donald Trump’s ever-shifting tariff policy has homebuilders down in the dumps.
The overall reading of the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) for March shows builder confidence at 39, a three-point drop from February.
It’s the lowest level in seven months and follows another three-point decline between January and February. The primary driver of the fall is Trump’s tariff threats and rising construction costs.
An index reading above 50 means more builders view conditions as good than poor.
“Construction firms are facing added cost pressures from tariffs,” said NAHB Chief Economist Robert Dietz in a statement. “Data from the HMI March survey reveals that builders estimate a typical cost effect from recent tariff actions at $9,200 per home. Uncertainty on policy is also having a negative impact on home buyers and development decisions.”
Other parts of the index also show a souring mood among builders. The number who say they’ve had to cut prices rose to 29% from 26%. Asked about sales conditions, the index fell three points to 43, the lowest point since December 2023. The gauge of buyer traffic fell five points to 24.
It’s not a secret as to why builders are pessimistic. Trump’s on-again, off-again levies have roiled an industry that craves certainty with regard to construction material costs. NAHB says they’ve gotten anecdotal reports of builders pricing in $7,500 to $10,000 more to build a home to mitigate the risk of hits on key trading partners holding over the long term.
They have been targeted at three key trade partners (Canada, Mexico and China) and two critical building materials (steel and lumber). Adding to the problem is that Trump changes his position regularly.
Trump has twice let a 25% levy on Canadian and Mexican goods take effect, only to pause them again shortly after. He’s added a 20% tariff on China, and a 25% levy on steel and aluminum.
He’s threatened to add a “reciprocal” tariff on Canadian lumber that would match the tariff Canada has on American lumber. However, Canada does not have a tariff on American lumber, so a reciprocal tariff would remove the existing 14.5% tariff the use already has on Canadian lumber.
He’s threatened Europe with tariffs a number of times, particularly on wine and alcohol. Because the steel levy affects the European Union, the bloc retaliated with tariffs on a number of American goods.
Trump’s maneuvering has turned April 2 into a monumental day for the global economy. That’s when the pause on Canadian and Mexican tariffs expires, and it’s also when Trump’s global reciprocal tariffs take effect. The latter could upend the price structure of goods and services across the world and potentially cause chaos within the vast majority of global economies and markets.
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