Imagine being a homebuilder right now, or in the market to buy a new home

The April NAHB home builder sentiment index rose 1 pt m/o/m to 40 but remaining well below 50. The estimate was for a 1 pt drop to 38. While the Present Situation rose 2 pts to 45, the Expectations component was down by 4 pts to 43, the lowest since November 2023. Prospective Buyers Traffic was 25, up 1 pt but half the level of the 50 breakeven.

The press release from the NAHB was littered with tariff talk. While the April headline got a slight lift as “The recent dip in mortgage rates may have pushed some buyers off the fence in March, helping builders with sales activity,” builder visibility is clear as mud and business is getting more costly. “At the same time, builders have expressed growing uncertainty over market conditions as tariffs have increased price volatility for building materials at a time when the industry continues to grapple with labor shortages and a lack of buildable lots.”

More, “Policy uncertainty is having a negative impact on home builders, making it difficult for them to accurately price homes and make critical business decisions. The April data indicates that the tariff cost effect is already taking hold, with the majority of builders reporting cost increases on building materials due to tariffs.”