Homebuilders are concerned about new tariffs and effect on material costs

Tariffs recently announced by President Donald Trump causing worry among U.S. homebuilders.

Those concerns, which FOX Business correspondent Gerri Willis reported on Wednesday, come after the president has pursued a slew of tariffs in recent weeks, including moving to reinstate a 25% tariff on steel imports and lift the levy on aluminum imports back to 25%.

Trump also previously announced 24% tariffs on imports from Canada and Mexico and a 10% tariff on imports from China; however, the levies targeting Canada and Mexico have been paused until at least early March.

President Donald Trump signs a series of executive orders in the Oval Office at the White House on Feb. 10. (Andrew Harnik/Getty Images / Getty Images)

On Tuesday, the National Association of Home Builders/Wells Fargo Housing Market Index for single-family housing showed a five-point drop in builder confidence month-over-month, hitting 42 in February. 

PRESIDENT TRUMP LOOKS TO BRING MANUFACTURING BACK TO US WITH TARIFFS

That, according to the NAHB, was below the index’s 50-point benchmark for positive sentiment and the “lowest level” it has reached in five months. 

Homebuilder sentiment for current sales conditions came in at 46 for February, marking a four-point drop from the prior month. Other data from the HMI indicated they feel negatively about prospects for sales in the coming six months, with their expectations for that also hitting 46.

“While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI. Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023,” NAHB Chairman Carl Harris said in a statement. 

Workers in front of homes under construction in Kyle, Texas, US, on Monday, March 18, 2024. The US Census Bureau is scheduled to release housing starts figures on March 19.  (Photographer: Jordan Vonderhaar/Bloomberg via Getty Images / Getty Images)

Applications to build new privately-owned housing came in at a seasonally adjusted rate of 1.48 million in January, marking a 0.1% decline from the prior month, according to new U.S. Census Bureau data released Wednesday.

Meanwhile, housing starts dropped 9.8% from December to a seasonally adjusted annual rate of 1.37 million. For single-family housing in particular, the rate was 993,000 in January, down 8.4% from December.

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Trump’s steel and aluminum tariffs are slated to come into force in mid-March. 

When the White House unveiled them last week, the NAHB said they are “totally counter” to efforts to improve housing affordability “by raising home building costs, deterring new development and frustrating efforts to rebuild in the wake of…