HousingWireHousingWire
Donald Trump’s second term has not been kind to homebuilders.
The president’s global tariff roller coaster directly and indirectly impacts many construction material imports, and his actions to crack down on illegal immigration have generated anecdotal reports of a labor shortage.
Although it’s hard to measure the impact of the latter, the former is undoubtedly taking its toll. Homebuilder stock prices have reacted swiftly and heavily to Trump’s ongoing tariff threats, implementations and subsequent pauses.
Since Trump was inaugurated, the S&P Homebuilders Select Industry Index (SPHSII) and major homebuilder stocks have seen more severe losses than that of the S&P 500, which has also been rocked by huge drops and wild volatility.
This has only accelerated since Trump announced his new global tariff regime on April 2, which he dubbed “Liberation Day.” The scope and scale of the tariffs shocked the world and sent markets into a death spiral.
While Trump has been steadfast in his commitment to tariffs, the fallout in the days after April 2 prompted him to pause the levies just hours after they took effect on April 9, a pause that expires after 90 days. He also previously paused 25% tariffs on many goods from Canada and Mexico, freezes that appear to be indefinite.
But one country — China — was excluded from the pause. Trump slapped consecutive 10% tariffs on China at the beginning of his term. He has since raised it to 145% as the tit-for-tat with Chinese President Xi Jinping escalated.
The China exclusion is brutal for homebuilders. According to the National Association of Home Builders (NAHB), China accounts for 27% of all U.S. construction material imports — a significantly higher share than any other country. And a John Burns Research & Consulting study conducted prior to April 2 estimated that the tariffs will add $12,800 to the cost of building a home.
The global tariffs aren’t the only problem for homebuilders. A 25% tariff on all steel and aluminum imports remains in place, and he’s previously threatened to place tariffs on lumber imports.
