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U.S. Homebuilder Confidence Falls to Seven-Month Low as Tariffs Drive Costs Higher

Builder sentiment drops to 39 in March, with rising material costs and economic uncertainty weighing on the housing market.

FILE - Lumber is piled at a housing construction site, Thursday, June 24, 2021, in Middleton, Mass. (AP Photo/Elise Amendola, File)
FILE - A construction worker examines part of a building under construction in Brick, N.J. on July 10, 2023. (AP Photo/Wayne Parry, File)
A "sold" sign is seen outside of a recently purchased home in Washington, U.S., July 7, 2022. REUTERS/Sarah Silbiger/File Photo
FILE - A carpenter aligns a beam for a wall frame at a new house site in Madison County, Miss., Tuesday, March 16, 2021. (AP Photo/Rogelio V. Solis, File)

Overview

  • The NAHB/Wells Fargo Housing Market Index declined to 39 in March, its lowest level since August 2024, reflecting a drop in builder confidence.
  • Tariffs on steel, aluminum, and lumber are estimated to add $9,200 in construction costs per home, further straining the housing market.
  • Homebuyer traffic reached its lowest level since December 2023, as builders report declining interest from prospective buyers.
  • Builders are responding to challenges with price cuts and incentives, with 29% cutting prices in March, up from 26% in February.
  • Mortgage rates have fallen for six consecutive weeks, offering some relief to buyers, while regulatory adjustments aim to ease supply-side pressures.