Podcast: Economic Data Shows Unsettled Housing Market
On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez discuss the latest economic news and what to expect from Congress following its recent recess.
Tariffs are creating market uncertainty, with builder confidence remaining lower according to NAHB’s April Housing Market Index (HMI) numbers. Sixty percent of respondents have already seen in an increase in prices and expect the price of homes to increase by 11%.
“It’s significant,” Tobin noted. “It’s going to price a lot of people out of the market.”
People are still buying homes, though, as indicated by the increase in new home sales. The increase is driven by the fact that, despite a modest decline, mortgage rates remain higher, which makes it less attractive for current home owners to put their homes on the market — leaving new homes as the primary option. And for the first time ever, the median price of an existing home ($403,700) is higher than the median price for a new home ($403,600).
Dips in mortgage rates could help unleash pent-up demand, but the Federal Reserve is unlikely to cut rates this year, with 6.25% rates likely not happening until 2026. And starts are down 11.4% this month, which will affect the overall supply.
“We’ve kind of pushed off this recovery we’ve been talking about,” Tobin shared, “which, again, pushes off homeownership for a lot of people, which pushes off that accumulation of wealth and taking that step into the middle class in this country.”
On the political side, Congress will be coming back after a two-week recess, with an eye to move forward on the Tax Cuts and Jobs Act by this summer and a spending bill to come in September.
“[The Tax Cuts and Jobs Act] is going to set tax policy in the country for the better part of the next decade,” Tobin stated, which will help establish certainty.
NAHB will be addressing tax policy and other issues at the 2025 Legislative Conference on June 11. Learn more at nahb.org.
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