A Realtor.com report finds that both the price and square footage of newly built homes are decreasing in about a quarter of the 100 largest metropolitan areas.

A survey from the National Association of Home Builders found contractors’ expectations fell to their lowest level in more than a year.

Tariffs and higher mortgage interest rates are at the top of the list.

Multifamily housing was a big part of the increase. But there is still high demand for single-family homes.

The National Association of Homebuilders reported its third straight month of improvement in its homebuilder confidence index, even though permits for new housing construction were down nearly 8% year over year.

They’re expecting to pay less interest on loans to build houses — and their clients are anticipating lower mortgage rates.

When you take mortgage rates, housing prices and incomes into account, homes are 44% less affordable than they were two years ago.

But the boom doesn’t seem to be reaching some parts of the country.

Some builders are starting to see more interest from buyers, including those who spent 2023 on the sidelines, waiting for better rates.

High mortgage rates and building costs have reversed the pandemic trend of bigger houses.