Sentiment among single-family homebuilders is souring amid economic uncertainty and tariffs, according to Wells Fargo (WFC) and the National Association of Home Builders’ (NAHB) Housing Market Index (HMI).
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
In June, the HMI tallied in at 32, below the estimate for 36 and falling from 34 in May. June’s reading is also the lowest since December 2022. A reading above 50 signals that a majority of surveyed builders feel confident about the current and near-term housing outlook.
The HMI measures the opinions on current sales of new single-family homes, the six-month outlook for single-family home sales, and the expected volume of potential buyers for new single-family homes.
Housing Market Cools Down
Prospective buyers are stepping back as mortgage rates remain high. That’s resulted in 37% of builders lowering prices in June, which is the highest level since the NAHB began tracking this statistic in 2022. In addition, an NAHB survey estimates that tariffs could increase the cost of building a home by $10,900, straining profit margins in the process.
Housing accounts for between 15% and 18% of U.S. gross domestic product (GDP). As a result, a weakening housing market could contribute to a broader economic slowdown, presenting challenges for housing-related stocks and the S&P 500 (SPX).
Head over to TipRanks’ Stock Analysis and News feed for more breaking news.
Looking for a trading platform? Check out TipRanks' Best Online Brokers guide, and find the ideal broker for your trades.
Report an Issue