The uncertainty surrounding tariffs on appliances and softwood lumber significantly impacts builders' confidence, reflected in a decrease in their Home Market Index (HMI) readings. A recent survey indicates a drop in builder sentiment before and after a pause on proposed tariffs, highlighting rising costs as a major concern. Though builders maintain a level of optimism for pro-development policies, current market conditions lead them to reassess expectations for 2025. Notably, fewer builders are cutting prices, with only 26% doing so in February, suggesting a cautious approach amid elevated interest rates and economic uncertainties.
With uncertainty over tariffs affecting costs, builder sentiment has declined, leading to a decrease in home sales expectations and a cautious approach to pricing.
Despite the challenges, only 26% of builders reduced home prices, showcasing their reluctance to cut pricing amid ongoing economic concerns and expectations for regulatory reforms.
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