Economic uncertainty and tariff negotiations have left home builders that lenders increasingly partner with feeling blue.
Builder confidence in June sank to a low akin to the onset of the coronavirus pandemic, according to the sector’s latest monthly index. The homebuilding industry is dealing with the high mortgage rates suppressing stronger housing demand, and unique challenges in labor shortages and trade negotiations heating up costs.
Herman Farrer/Herman Farrer Photography
The nation’s housing market is still short around 1.5 million homes, an ultimate tailwind for home builders, said Robert Dietz, the National Association of Home Builders’ senior vice president and chief economist. Anticipated short-term interest rate cuts from the Federal Reserve that could have an influence on long-term mortgage borrowing costs, and tariff certainty may stabilize homebuilder economics, while certain aspects of President Trump’s Big Beautiful Bill could offer greater economic momentum.
The expansion of a low-income housing credit and extension of the lower tax rates in the bill may benefit homeowners in addition to builders and remodelers that are small businesses, according to Dietz.
“There’s just a lot to cheer for that will help the housing market,” Dietz said of the bill.
That statement comes with a caveat, however, as the bill which had yet to pass at the time of Dietz’s interview does do things like eliminate some tax credits for green construction. National Mortgage News spoke with Dietz about the homebuilder outlook on tariffs, the immigration enforcement impact on labor, and construction industry economics at large.
This interview has been edited for length and clarity.
