Builder confidence in the market for newly built single-family homes dropped three points in March to a reading of 39 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), marking the lowest level in seven months; any number over 50 indicates that more builders view conditions as good than poor.
“Construction firms are facing added cost pressures from tariffs,” said NAHB Chief Economist Robert Dietz. “Data from the HMI March survey reveals that builders estimate a typical cost effect from recent tariff actions at $9,200 per home. Uncertainty on policy is also having a negative impact on home buyers and development decisions.”
The HMI index gauging current sales conditions fell three points to 43 in March, its lowest point since December 2023. The gauge charting traffic of prospective buyers fell by five points to 24 while the component measuring sales expectations in the next six months held steady at 47.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell three points in March to 54, the Midwest also dropped three points to 42, the South dropped four points to 42 and the West dipped two points to 37.
However, NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, North Carolina, pointed out that the economic environment has positive aspects for home construction.
“Builders are starting to see relief on the regulatory front to bend the rising cost curve, as demonstrated by the Trump administration’s pause of the 2021 IECC building code requirement and move to implement the regulatory definition of ‘waters of the United States’ under the Clean Water Act consistent with the US Supreme Court’s Sackett decision,” said Hughes.
