Homebuilder confidence in the South remained firm at 46 in February, even as the national housing market sentiment took a hit amid tariff concerns, according to the National Association of Home Builders (NAHB) Homebuilder Confidence Index
- The national index fell five points to 42, marking the lowest level since September 2024 and the sharpest monthly drop since May 2024.
Breaking It Down: The South stood out as the most resilient region, holding steady at 46. The Northeast saw the biggest regional decline, slipping three points to 57, while the Midwest fell two points to 45 and the West edged one-point lower to 39.
- All major components of the index dropped below 50, with current sales conditions down four points to 46, sales expectations for the next six months plunging 13 points to 46, and prospective buyer traffic falling three points to 29.
What They’re Saying: Robert Dietz, NAHB Chief Economist, highlighted the impact of tariff uncertainty: “With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has builders further concerned about costs.”
- Dietz noted that survey responses collected before a one-month pause on proposed tariffs for Canadian and Mexican goods yielded a lower index reading of 38. After the pause was announced, responses produced a higher reading of 44.
The Bottom Line: Builders must look ahead, and even the threat of tariffs—regardless of whether they are enacted—can weigh on confidence. The latest figures underscore how economic uncertainty and cost concerns continue to challenge the housing market outlook.