Home builders are gloomy over Trump’s tariffs and economic uncertainty

Home builders are feeling the sting from President Donald Trump’s trade war and growing economic uncertainty, adding to the challenge of building enough homes to fix America’s shortage.

Builder sentiment in the market for new homes has been slumping for months and stayed low in April, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Wednesday. When asked about tariffs’ effect on their businesses, 60% of builders said their suppliers have already increased, or announced increases, on goods prices because of tariffs. Builders are estimating a typical cost effect of nearly $11,000 per home, given how many products from abroad will be hit by the trade war.

The gloominess could make it harder for builders to ramp up construction, which many economists say is essential to tame housing costs. Experts say the country is short somewhere between 1.5 million and 4 million homes, and prices for renters and buyers have stayed high largely because there aren’t enough homes to go around. The longer it takes to fill that gap, the longer people will see housing costs take up large chunks of their budgets.

Jim Tobin, president and chief executive of NAHB, said “builders are taking a little bit of a pause” to better understand how Trump’s policies — on trade, immigration, and more — will shape the broader economy.

“Are they getting ready to start newer projects? Are they pulling permits?” Tobin told the Washington Post. “I think we’re going to see a little bit of more careful adjustment in home building until these policies do shake out.”

Trump has made tariff policy a central part of his economic vision, vowing to make trade with other nations more fair to American households and workers. But the tumultuous rollout of those policies has spurred chaos in the financial markets and increased the odds of a recession.

Recently, the White House paused many of the steepest import taxes on most countries for 90 days, while further hoisting tariffs for China. It left in place a baseline 10% tariff on all imports from most countries, and continued tariffs on imports of steel, aluminum, and autos.

Home builders had generally cheered Trump’s return to office, betting looser regulations and what they hoped would be an economic boom would make it easier to build and sell. Over the past few weeks, they also got a small confidence boost from easing mortgage rates, the survey showed.

But that optimism is waning, especially since so many aspects of Trump’s agenda weigh on the housing market. The administration’s immigration crackdown has made undocumented construction workers more hesitant to show up to job sites out of fears of being detained, multiple builders told the Post. Some companies are adding clauses to their contracts that allow them to adjust prices if their material costs — say, on appliances from Mexico or lumber from Canada — suddenly spike. The stock market fluctuations have also made some wealthier buyers jittery.

But not everyone is feeling the gloom or attributing much to Trump’s tariffs. In the Tampa, Fla., area, builder Mike Cogdill said inflation has been pushing up costs on everything — windows, plumbing, metal roofs, plywood — for years. He’s had a few subcontractors reach out looking for work, suggesting the job market is struggling a bit more than usual. But he doesn’t have plans to slow his projects, which can go upward of $500,000.

“There’s a lot of hype in these prices,” Cogdill said. “What’s being said is not really what’s happening sometimes.”