Homebuilders are feeling pessimistic about future sales
Homebuilders are feeling pessimistic about future sales
On Friday, the National Association of Realtors will give an update on existing home sales. But we also got some news about the market for new homes: A survey from the National Association of Home Builders found that contractors’ expectations for future sales volume fell to their lowest level in more than a year.
That’s largely thanks to uncertainty about tariffs and their potential impact on materials costs.
Homebuilders rely on imported goods to make homes, including lumber, metals and appliances.
“And if their costs go up, that will translate into prices probably being higher than they would otherwise,” said Nancy Vanden Houten, lead economist at Oxford Economics.
Higher input costs could discourage new construction, which has been adding much-needed supply to a tight housing market.
“Would-be homeowners have faced a lot of hurdles for several years,” Vanden Houten said. “And a lack of new supply would only make those hurdles higher.”
Another factor that could affect supply is the availability of workers. If the Trump administration continues to crack down on immigration, “that could be another obstacle for homebuilders, who may wish to expand supply, but not be able to have the workers to do so,” said Charlie Dougherty, senior economist at Wells Fargo.
As a result, Dougherty said that home affordability probably won’t improve much over the coming year.
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