The spring housing season is off to a shaky start as tariff concerns rattle builder sentiment.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose slightly to 40 in April, one point higher than in March, and modestly above economists’ expectations of 38, according to data polled by Bloomberg.
Still, a reading below 50 indicates that more builders view conditions as poor than good.
“Policy uncertainty is having a negative impact on home builders, making it difficult for them to accurately price homes and make critical business decisions,” NAHB chief economist Robert Dietz wrote in the press release.
Builders are also reporting rising costs for building materials due to tariffs. Data from the National Association of Home Builders found that 60% of builders are facing suppliers who have already hiked prices or are planning to increase them due to trade levies. On average, suppliers have raised prices by 6.3% in response to current, enacted, or anticipated tariffs, adding an estimated $10,900 to the cost of a new home.
Homebuilders continue to navigate a complex landscape. The US may revisit its trade policies with Canada and Mexico, while China-US negotiations remain unresolved. This uncertainty pressured the gauge for sales expectations in the next six months to fall 4 points to 43 in April.