April 2025 - Hillwood Loves Realtor

U.S. Economy Contracted in First Quarter of 2025

Jing Fu2025-04-30T10:20:27-05:00

The U.S. economy contracted in the first quarter of 2025 for the first time in three years, driven by a sharp surge in pre-tariff imports, softening consumer spending, and a decline in government spending. According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025, following a 2.4% gain in the fourth quarter of 2024. This marks the first quarter of economic contraction since the first quarter of 2022. NAHB predicted a 0.2% increase for the first quarter of 2025. Furthermore, the data from the GDP report suggests that inflationary pressure persisted. The GDP price index rose 3.4% for the first quarter, up from a 2.2% increase in the fourth quarter of 2024. The Personal Consumption Expenditures Price (PCE) Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, rose 3.6% in the first quarter. This is up from a 2.4% increase in the fourth quarter of 2024. The contraction in real GDP primarily reflected a sharp increase in imports and a decrease in government spending. Imports, which are a subtraction in the calculation of GDP, surged at an annualized rate of 41.3% in the first quarter, as businesses rushed to stockpile goods ahead of implementing tariffs. While goods imports spiked by 50.9%, services imports increased by 8.6%. The import surge contributed to a record-high trade deficit and subtracted more than five percentage points from the headline GDP figure. Government spending decreased at an annual rate of 1.4% in the first quarter. Federal spending fell sharply by 5.1%, partially offset by a modest 0.8% increase in state and local government expenditures. Consumer spending, a key driver of the economy, softened. It rose at an annual rate of 1.8%, the slowest pace in seven quarters. Spending on goods increased by 0.5%, while expenditure on services grew by 2.4%. Private inventories were the largest contributor to the increase in gross private domestic investment. Nonresidential fixed investment increased by 9.8%, with notable increases in equipment (+22.5%) and intellectual property products (+4.1%). Residential fixed investment posted a 1.3% gain, following a 5.5% increase in the previous quarter. Within residential categories, single-family structures rose 5.9%, improvements increased 3.6%, while multifamily structures fell 11.5%. For the common BEA terms and definitions, please access bea.gov/Help/Glossary. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

U.S. Economy Contracted in First Quarter of 2025Jing Fu2025-04-30T10:20:27-05:00

House Sharing is Not Just for Young Adults

Natalia Siniavskaia2025-04-30T08:23:25-05:00

A record-high 6.8 million households shared their housing with unrelated housemates, roommates or boarders in 2023. While college-age and young adults make up the largest subset of house sharers (close to 41%), this type of living arrangement is gaining popularity among older householders fastest, with the 55+ segment accounting for 30% of all house-sharing households in 2023. The number of households sharing housing with nonrelatives had been rising steadily since the 2008 housing crash until the COVID-19 pandemic interrupted the upward trend. During that period, the count of households with at least one unrelated member increased from 5.3 million in 2008 to over 6.7 million in 2019. At the same time, the percentage of house-sharing households grew from 4.7% to 5.4%. The pandemic dramatically redefined living arrangement preferences. Reflecting the shift towards more spacious, lower-density independent living, the number and percentage of house-sharers collapsed in 2020 (although the data collection issues during the lockdown stages of the COVID-19 pandemic make the 2020 estimates less reliable). While the percentage of households sharing housing has climbed since the pandemic lows, it remains below the 2019 peak. However, the count of house-sharing households in the U.S. is now at a new record-high point. This is largely reflective of a faster household formation rate since the end of the pandemic, as well as the growing popularity of home sharing arrangements. Young Adults (25-34) Young adults in the 25-34 age group make up the largest (close to 1.6 million, or 23%) cohort of households that share housing with unrelated housemates. Over the last two decades, amid the rising housing burdens and cost of living, house sharing became a way for young adults to afford to leave parental homes. From 2005 to 2017, as the headship rates for this age group declined precipitously and millions of young adults dropped out of the housing market, house sharing became more common among those who managed to stay out of parental homes. In 2017, when 25 to 34-year-old adults registered record low headship rates, one in eleven householders in this age group shared housing with unrelated housemates. By 2023, when the headship rates rebounded, the share of 25 to 34-year-old house-sharing householders dropped to 7.9%, on par with the 2005 reading. While it is tempting to assume that the high prevalence of house sharing among young adults reflects a rise in unmarried partnerships, these are not considered house-sharers in this analysis. Unmarried partners tend to function as a unit similar to a married couple, dividing their economic, social and financial responsibilities, and not just those related to house-sharing. To differentiate between these different demographic trends, unmarried partnerships are counted as independent households for the purposes of this analysis.1 College-Age Adults (18-24) College-age adults make up the second largest group of house-sharing householders (1.2 million, or 17%). While the total counts are substantial, they represent a decline since 2005 when 1.3 million 18 to 24-year-old householders shared housing with unrelated roommates, accounting for 22% of house-sharing households. The lower counts of house sharers in this age group reflect, among other factors, the rising share of college-age adults living with parents, declining rates of college attendance in recent years, as well as slower youth population growth. Nevertheless, the youngest householders remain the age group that is most likely to share housing. As of 2023, over one in five leaseholders/homeowners in the 18-24 age group shared housing with unrelated roommates or housemates. Older Adults 55+ Older adults ages 55 and over registered the most substantial gains in house-sharing arrangements since the housing boom of the mid-2000s[1]. The number of households lead by 55 to 64-year-old adults that shared housing almost doubled since 2005 to 1 million. Their segment increased from 9% of house-sharing households in 2005 to 14% in 2023. At the same time, the number of house-sharers among 65+ householders increased 2.7 times. These oldest householders now account for over a million, or 15% of all house-sharing households, more than doubling their share of 6.8% in 2005. Partially, the surge in the number of older households sharing housing with nonrelatives simply reflects the aging U.S. population with numerous baby boomers filling the ranks of 55+ households. Partially, it captures the changing preferences, as the older householders are now more likely to live with unrelated members. In 2005, 3% of 55 to 64-year-old householders shared housing with nonrelatives. This share increased to 3.6% in 2013 and continued its climb to 4.1% in 2023. The increase in the percentage of 65+ householders sharing housing was similarly persistent, rising from 1.7% in 2005, to 2.3% in 2013, and climbing further to reach 2.8% in 2023. Unlike the rates of house-sharing among younger adults, the rates for the 55+ age group appear less cyclical. While still largely unconventional among 55 and older householders, house sharing is on the rise, potentially offering a cost-effective option for older adults to stay in place as they age.2 The ACS microdata allows differentiating between unmarried partners and those living with roommates/housemates/nonrelatives, even though they are all included in Census’s separate variable that counts unrelated household members.Conventionally, the population in group quarters, such as dormitories, nursing homes, etc., are not included in household counts. 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House Sharing is Not Just for Young AdultsNatalia Siniavskaia2025-04-30T08:23:25-05:00

Jobs Openings Fall as Economy Slows

Robert Dietz2025-04-29T12:14:56-05:00

Consistent with soft sentiment data, the count of job openings for the overall economy and construction fell in March as employers slowed hiring plans amid a broader economic slowdown, per the March Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The number of open jobs for the overall economy declined from 7.48 million in February to 7.19 million in March. This is notably smaller than the 8.09 million estimate reported a year ago and reflects a softened aggregate labor market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve move on interest rate reductions. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. However, tariff proposals may keep the Fed on pause in the coming quarters. The number of open construction sector jobs fell from a revised 286,000 in February to 248,000 in March. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (338,000) due to a slowing of construction activity. The chart below notes the recent decline for the construction job openings rate, which is now back to 2019 levels. The construction job openings rate moved lower to 2.9% in March, significantly down year-over-year from 4%. The layoff rate in construction stayed low (1.7%) in March. The quits rate declined to 1.8% in March. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Jobs Openings Fall as Economy SlowsRobert Dietz2025-04-29T12:14:56-05:00

April Mortgage Rates Edge Up Following Treasury Sell-Off

Catherine Koh2025-04-25T09:14:35-05:00

Mortgage rates edged up slightly in April, with the average 30-year fixed-rate mortgage settling at 6.73%, according to Freddie Mac. This marks an 8-basis-point (bps) increase from March. The 15-year fixed-rate mortgage increased by 7 bps to 5.90%. The uptick in mortgage rates followed a sell-off in U.S. Treasury securities, driven by concerns surrounding the ongoing trade war. As demand for Treasuries declined, prices fell and yields rose. The 10-year Treasury yield averaged 4.28% in April, with the most recent weekly yield rising to 4.34%. The sell-off signals a potential loss of investor confidence in what is typically considered a safe-haven asset. In response to rising yields, the president has pressured Federal Reserve Chair Jerome Powell to cut interest rates. However, at the recent Economic Club of Chicago, Chairman Powell stated that “tariffs are highly likely to generate at least a temporary rise in inflation” and emphasized the Fed’s obligation to price stability, adding that it must ensure “a one-time increase in the price level does not become an ongoing inflation problem”. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

April Mortgage Rates Edge Up Following Treasury Sell-OffCatherine Koh2025-04-25T09:14:35-05:00

Existing Home Sales Receded in March

Jing Fu2025-04-24T12:16:51-05:00

Existing home sales declined in March, according to the National Association of Realtors (NAR), as affordability challenges continued to weigh on the market. For the first time, the median home price surpassed $400,000 for the month of March, underscoring the ongoing pressure on prospective buyers. While mortgage rates have eased slightly, persistent economic uncertainty may continue to limit buyer activity in the near term. While existing home inventory improves and the Fed continues lowering rates, the market faces headwinds as mortgage rates are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025. These prolonged rates may continue to discourage homeowners from trading existing mortgages for new ones with higher rates, keeping supply tight and prices elevated. As such, sales are likely to remain limited in the coming months due to elevated mortgage rates and home prices. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, declined 5.9% to a seasonally adjusted annual rate of 4.02 million in March. On a year-over-year basis, sales were 2.4% lower than a year ago. The share of first-time buyers rose to 32% in March, up from 31% in February and unchanged from March 2024. The existing home inventory level was 1.33 million units in March, up 8.1% from February and 19.8% from a year ago. At the current sales rate, March unsold inventory sits at a 4.0-months’ supply, up from 3.5 months in February and 3.2 months in March 2024. This inventory level remains low compared to balanced market conditions (4.5 to 6 months’ supply) and illustrates the long-run need for more home construction. Homes stayed on the market for an average of 36 days in March, down from 42 days in February but up from 33 days in March 2024. The March all-cash sales share was 26% of transactions, down from 32% in February and 28% a year ago. The March median sales price of all existing homes was $403,700, up 2.7% from last year. This marked the 21st consecutive month of year-over-year increases. The median condominium/co-op price in March was up 1.5% from a year ago at $363,000. This rate of price growth will slow as inventory increases. In March, existing home sales declined across all four major U.S. regions. The West experienced the steepest drop, with sales falling 9.4%, followed by the South (-5.7%), the Midwest (-5.0%), and the Northeast (-2.0%). On a year-over-year basis, sales rose slightly in the West by 1.3%, declined in the South and Midwest by 4.2% and 3.1% respectively, and remained unchanged in the Northeast. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 70.6 to an all-time low of 67.3 in February. This decline suggests elevated home prices and higher mortgage rates continue to constrain affordability. On a year-over-year basis, pending sales were 9.9% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Receded in MarchJing Fu2025-04-24T12:16:51-05:00

New Home Sales Rise in March

Robert Dietz2025-04-23T10:33:44-05:00

A modest decline in mortgage rates and lean existing inventory helped boost new home sales in March even as builders and consumers contend with uncertain market conditions. Sales of newly built, single-family homes in March increased 7.4% to a 724,000 seasonally adjusted annual rate from a revised January number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in March was up 6.0% compared to a year earlier. The March new home sales data shows that demand continues to be present in the market, provided affordability conditions permit a purchase. An increase in economic certainty would be a big boost to future sales conditions. Lower mortgage interest rates helped boost the pace of new home sales in March. In February, the average 30-year fixed rate mortgage was 6.84%, while in March it fell to 6.65%. A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the March reading of 724,000 units is the number of homes that would sell if this pace continued for the next 12 months. New single-family home inventory in March continued to rise to a level of 503,000, up 7.9% compared to a year earlier. This represents an 8.3 months’ supply at the current building pace. This level of supply continues to be reasonable given that the resale, single-family months’ supply remains lean at just 3.4. The count of completed, ready-to-occupy homes available for sale increased to 119,000, up 34% from a year ago. However, the March data also is showing signs that the total amount of inventory in the new construction space has slowed given soft housing conditions at the start of 2025. For example, the count of new homes available for sale that are under construction (263,000 in March) is down 5% year-over-year and 6% lower than the non-seasonally adjusted peak count set in October 2024. The median new home sale price in March was $403,600, down 7.5% from a year ago. Sales were particularly strong at lower price levels. Compared to March 2024, new homes sales were 33% higher for homes priced below $300,000 and 28% higher for new homes priced between $300,000 and $400,000. Regionally, on a year-to-date basis, new home sales are up 12.9% in the South, but are down 32% in the Northeast, 18.3% in the Midwest and 6% in the West. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

New Home Sales Rise in MarchRobert Dietz2025-04-23T10:33:44-05:00

The Power of Women in the Workforce

Jing Fu2025-04-22T09:18:11-05:00

Over the past 125 years, women have played a crucial and multifaceted role in the labor force. Increasing women’s participation in the workforce is not only essential for individual and family well-being, but also contributes significantly to overall labor force participation rates and economic growth by adding more workers and enhancing overall productivity1. Historically, women’s labor force participation rate rose rapidly between 1948 and 2000, peaking around 60% in 1999. During the same period, men’s participation rates declined. However, since 2000, the growth in women’s labor force participation has flattened and then declined. According to the March 2025 Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), women’s labor force participation rate held steady at 57.5%, and women now represent nearly half (47%) of the total U.S. labor force. Selected Categories Prime-age women (ages 25-54) represent a significant and growing segment of the U.S. labor force. As of 2024, they accounted for nearly 30% of the civilian labor force, compared to 34% for prime-age men. According to the latest data from the Current Population Survey (CPS), prime-age women had a labor force participation rate of 78%, the highest among all female age groups. This rate has fully recovered from the COVID-19 pandemic, surpassing its previous peak recorded in February 2020. As discussed in the previous blog, higher levels of educational attainment are strongly associated with higher labor force participation and lower unemployment. Women with a bachelor’s degree or higher have played a vital role in shaping the labor market. In 2024, about 70% of women with this level of educational attainment were active in the labor force, compared to only 34% of women who had not completed high school. The CPS data also reveals notable differences in women’s labor force participation based on parental status. Women with older children (ages 6 to 17) and no children under 6 years old had a higher labor force participation rate than those with younger children. Interestingly, women without children had a relatively lower labor force participation rate compared to those with children. Further research from the Brookings Institution and The Hamilton Project2 highlights a significant shift: women with young children (under 5 years), especially those who are highly educated, married, or foreign-born, are more likely to be in the labor force now than they were before the pandemic. Women’s labor force participation also varies by race and ethnicity. Among women ages 16 and over, Black women had the highest participation rate at 61%, followed by Hispanic women (59%), Asian women (59%), and White women (57%). The figure below reflects the diversity and complexity of women’s roles in the workforce. Women in Industry As more women enter the labor force, they are increasingly shaping a broad range of industries–from healthcare and education to leisure and hospitality, retail, technology, and construction. In 1964, women were primarily employed in a narrower set of sectors. The top four industries employing the most women at that time were: manufacturing; trade, transportation, and utilities; local government; and education and health services3. By 2024, however, women’s participation in the workforce has expanded significantly, both in scope and impact. According to the latest CPS data, women dominated the education and health services sector, where they hold approximately 27.6 million jobs. That means seven in every ten workers in this field are women. Moreover, women now make up more than half of the workforce in several other key industries, including other services, leisure and hospitality, and financial activities. Despite their growing role in the workforce, they remain underrepresented in certain sectors, most notably, construction. Although women now make up a significant portion of the overall labor force, they account for just 11% of total employment in the construction industry. Of those, only 2.8% of women work in actual trade roles, while most women in the industry are employed in: Office and administrative support Management Business Financial operations Gender Pay Gap by Occupation While the gender pay gap in the U.S. has narrowed significantly over the past few decades, it remains a persistent issue in the labor market. According to a study4 by the Pew Research Center, women earned about 65 cents for every dollar earned by men in 1982. By 2023, that figure had risen to approximately 82 cents on the dollar—a clear sign of progress. However, the pace of change has slowed considerably in recent years. In 2024, the CPS data shows that women working full time earned a median weekly wage of $1,043, compared to $1,261 for men. This means women earned 83 cents for every dollar earned by men—a 17% gender wage gap. At the occupational level, women earn less than men across all major occupational groups, even ones dominated by women. The smallest gender pay gap was found in community and social services occupations. In contrast, occupations in legal, sales and related, protective services, and production display larger disparities in earnings between women and men. The Future of Women in the Workforce Looking ahead to 2033, the number of women in the labor force is expected to continue growing, driven primarily by the prime-age women (ages 25 to 54). BLS employment projections estimate that roughly 3.2 million prime-age women will join the workforce between 2023 and 2033. During this period, their participation rate is projected to increase slightly, reflecting continued momentum in women’s economic engagement. Meanwhile, the U.S. labor market is experiencing a critical shortage of skilled workers, especially in fields like STEM (science, technology, engineering, and math) and skilled trades. As the NAHB Chief Economist stated, “The ultimate solution for the persistent, national labor shortage will be found…by recruiting, training and retaining skilled workers.” This applies equally to the women’s labor force. Women’s participation is closely tied to their access to education and skills development. As more women pursue higher education and specialized training, their career opportunities expand, particularly in fields previously dominated by men. This progress can help narrow the gender pay gap over time. However, women often shoulder disproportionate family and caregiving responsibilities, not only during their reproductive years, but throughout their lives. According to the American Time Use Survey (ATUS), on a typical weekday, prime-age working women spent about four hours on caregiving and household tasks, such as household activities, caring for and helping household members, and purchasing goods and services. This is nearly twice the time men spent on the same activities. Many women face a tough decision between career advancement and family caregiving responsibilities, often leading to reduced work hours or even complete withdrawal from the labor force. To support and increase women’s labor force participation, it may be beneficial to consider a range of policies and workplace reforms. For example, promoting flexible work arrangements can help women better balance professional and personal responsibilities. Narrowing the gender pay gap would also play a critical role in ensuring fair compensation and financial security. Furthermore, expanding access to affordable and high-quality childcare could remove a major barrier for many working mothers. In addition, continued investment in education and training programs would enable women to advance in their careers and contribute to broader, long-term economic growth. To conclude, empowering women to succeed in the workforce not only improves individual and family well-being, but also strengthens the entire economy. Note: “Changing Business Cycles: The Role of Women’s Employment,” Stefania Albanesi, NBER Working Paper, No. 25655, March 2019. ↩︎https://www.brookings.edu/articles/prime-age-women-labor-market-recovery/ ↩︎“Women At Work”, Spotlight on Statistics, U.S. Bureau of Labor Statistics, March 2017.https://www.bls.gov/spotlight/2017/women-at-work/pdf/women-at-work.pdf ↩︎“Gender Pay Gap in U.S. Has Narrowed Slightly Over 2 Decades,” Richard Fry and Carolina Aragão, Pew Research Center, March 4, 2025. ↩︎ Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

The Power of Women in the WorkforceJing Fu2025-04-22T09:18:11-05:00

Who Influences the Purchasing of Building Products?

Eric Lynch2025-04-21T08:18:04-05:00

In a previous post, NAHB analyzed where builders and remodelers purchased products, regardless of who ultimately purchases them (themselves or subcontractors). In this post, the question shifts to who is most often responsible for the choice of particular products. When averaging over all 24 building product categories, 60% of builders report they had the most influence on product selection compared to 49% of remodelers. Still, these shares are ranked the highest within their respective sector. Both builders and remodelers reported similar shares of influence for subcontractors, dealers & suppliers, and architects. However, when it comes to the greatest influencer being the customer, this is more prevalent among remodelers (26%) than among builders (16%). When analyzing the top seven products most often chosen by the customer, there is a considerable gap between remodelers and builders. Most of these products (cabinets, lighting, carpeting, ceramic tile, countertops, other flooring) typically are chosen for decorative qualities which are rated quite important among customers. Please click here to be redirected to the full report. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Who Influences the Purchasing of Building Products?Eric Lynch2025-04-21T08:18:04-05:00

State-Level Employment Situation: March 2025

Danushka Nanayakkara-Skillington2025-04-18T12:20:32-05:00

Nonfarm payroll employment increased in 37 states and the District of Columbia in March compared to the previous month, while it decreased in 12 states. Wyoming reported no change during this time. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 228,000 in March following a gain of 117,000 jobs in February. On a month-over-month basis, employment data was most favorable in Texas, which added 26,500 jobs. Pennsylvania came in second (+20,900), followed by Florida (+18,100). Meanwhile, a total of 33,900 jobs were lost across 12 states, with California reporting the steepest job losses at 11,600. In percentage terms, employment increased the highest in Missouri at 0.5%, while Connecticut saw the biggest decline at 0.3% between February and March. Year-over-year ending in March, 1.9 million jobs have been added to the labor market, which is a 1.2% increase compared to the March 2024 level. The range of job gains spanned from 300 jobs in the District of Columbia to 192,100 jobs in Texas. Four states lost a total of 34,700 jobs in the past 12 months, with Iowa reporting the steepest job losses at 11,800. In percentage terms, the range of job growth spanned 2.6% in Idaho to 0.1% in Colorado. The District of Columbia was unchanged while West Virginia, Massachusetts, Arizona, and Iowa declined by 0.3%, 0.3%, 0.3%, and 0.7% respectively. Construction Employment Across the nation, construction sector jobs data 1—which includes both residential and non-residential construction—showed that 30 states reported an increase in March compared to February, while 17 states and the District of Columbia lost construction sector jobs. The three remaining states reported no change on a month-over-month basis. Texas, with the highest increase, added 8,500 construction jobs, while California, on the other end of the spectrum, lost 3,700 jobs. Overall, the construction industry added a net 13,000 jobs in March compared to the previous month. In percentage terms, Kentucky reported the highest increase at 3.6% and Mississippi reported the largest decline at 3.4%. Year-over-year, construction sector jobs in the U.S. increased by 143,000, which is a 1.8% increase compared to the March 2024 level. Texas added 28,700 jobs, which was the largest gain of any state, while California lost 23,400 construction sector jobs. In percentage terms, New Mexico had the highest annual growth rate in the construction sector at 12.0%. Over this period, Washington reported the largest decline of 5.3%. For this analysis, BLS combined employment totals for mining, logging, and construction are treated as construction employment for the District of Columbia, Delaware, and Hawaii. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

State-Level Employment Situation: March 2025Danushka Nanayakkara-Skillington2025-04-18T12:20:32-05:00

Despite Exemptions and Delays, Tariffs are Already Affecting Builders

Paul Emrath2025-04-15T10:17:36-05:00

Home builders have already started to feel the effects of U.S. tariff policy, according to recent NAHB member surveys. This is true even though the Administration did not announce its list of reciprocal tariffs until April 2nd, lumber along with USMCA-compliant imports from Canada and Mexico were exempt, and a week later the Administration enacted a 90-day hiatus, with tariffs on countries other China limited to 10% over this time. The Administration subsequently granted further temporary exemptions from the reciprocal tariffs for a broad range of electronic products imported from China. After all this, significant uncertainty about the final outcome still remains. The U.S. may revisit trade policy for Canada and Mexico, China-U.S. negotiations are unsettled, and the effects of the 10% tariff on building products from other countries are difficult to predict. Moreover, exactly what will happen at the end of the 90-day hiatus remains unclear. In the meantime, economic uncertainty can adversely affect consumer confidence and make prospective home buyers hesitate. This is one of the reasons the NAHB/Wells Fargo Housing Market Index (HMI) declined in March. The latest NAHB estimate (based on cost data from RSMeans and PPI inflation rates) is that the average new single-family home requires $174,155 worth of building materials. Previous NAHB research has shown that 7.3% of materials in residential construction, or $12,713 of materials costs for the average single-family home, is imported. Based on this, it may seem that tariffs would have a limited effect on home builders. However, as noted above, the uncertainty caused by the mere announcement of tariffs can have an adverse effect on the behavior consumers and even businesses. In recent surveys, NAHB builders and remodelers reported that building material suppliers had already increased their prices—by an average of 5.5% and 6.9%, respectively—due to announced, enacted or anticipated tariffs. The data on builders came from the HMI survey and were collected during the first two weeks of March. The data on remodelers came from the survey for the NAHB/Westlake Royal Remodeling Market Index and were collected during the last week of March and first three days of April. NAHB will continue to monitor material prices given the uncertainty and fluidity of the tariff situation. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Despite Exemptions and Delays, Tariffs are Already Affecting BuildersPaul Emrath2025-04-15T10:17:36-05:00

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