Homebuilder Confidence Falls to Five-Month Low Amid Tariff Concerns

Rising mortgage rates, high construction costs, and tariff uncertainty compound challenges for U.S. housing market recovery.

The National Association of Home Builders/Wells Fargo Housing Market Index dropped five points to 42 in February, signaling the lowest builder confidence since September 2024.
Builders cite rising mortgage rates, hovering near 7%, and high construction costs as major factors contributing to declining confidence.
Tariff policies, including existing levies on Chinese goods and potential increases on imports from Canada and Mexico, are increasing uncertainty and material costs for builders.
Sales expectations for the next six months saw a steep 13-point drop, the sharpest decline since the early pandemic, reflecting growing pessimism about market conditions.
The decline in builder sentiment raises concerns about reduced housing supply, potentially exacerbating affordability challenges in an already strained market.