On April 17th, although sales have slightly rebounded, the confidence index of US real estate developers has only slightly increased this month. At the same time, expectations for future demand have fallen to their lowest level in over a year, while building material prices continue to rise against the backdrop of rising tariffs. The overall market condition index jointly released by the National Association of Home Builders (NAHB) and Wells Fargo rose 1 point to 40 in April, still hovering in the low range since the end of 2023. The previous median expectation was 38. However, the performance of each sub item in the index varies. Builders’ expectations for sales prospects over the next six months have dropped by 4 points to 43, marking the lowest level since November 2023. At the same time, the current sales index of single family homes and the viewing flow index of potential homebuyers have slightly increased. The data indicates that in the context of challenges faced on both the demand and supply sides, construction activities in the US new residential market will continue to be suppressed. Homebuyers are under pressure from high housing prices and mortgage rates, with mortgage rates soaring to 6.81% last week, while builders now have to deal with higher building material costs due to tariffs. NAHB estimates that the tariffs imposed by the Trump administration will increase the cost of each residential building for contractors by $10900. The agency stated that approximately 60% of builders have reported that suppliers have raised material prices due to tariffs or have announced an imminent price increase.
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