As reported by Axios, the national housing picture is exhibiting clouds on the horizon. Updated on February 19, 2025
Talk about a head fake. After a surge in homebuilding in the final weeks of 2024, new data today shows a sharp pullback in activity.
Why it matters: Few sectors capture the story of the economy in recent years better than housing — Americans' frustration with high prices, elevated borrowing costs, CEO uncertainty, and a supply-demand mismatch (for goods and workers).
- Two new economic factors could be added to that list of long-running housing issues: President Trump's trade war and deportation policies.
"[U]ncertainty over the scale and scope of tariffs has builders further concerned about costs," Robert Dietz, chief economist at the National Association of Homebuilders, said Tuesday alongside an index that showed dampened industry sentiment.
The intrigue: High housing costs — made worse by an upswing in mortgage rates — are keeping some would-be buyers sidelined. Trump's policies could have more inflationary consequences than not.
- Homebuilders rely heavily on immigrant workers, who could be difficult to find with a crackdown on immigration (though at least one top Fed official has pointed to immigration contributing to higher rents).
