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New home sales ticked higher in March, but homebuilder company executives warn about the impacts of US President Trump's tariffs. Yahoo Finance Senior Reporter Dani Romero outlines the latest.
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Well, new home sales ticked higher in March as home buyers jumped on higher inventory levels to start the spring selling season. But home buyers are sounding the alarm that tariffs could potentially weigh on their business. Yahoo Finance's own, Danny Romero is here with more. Danny, what are these home builders saying?
So, a few home builders, like we said, are sounding the alarm. They're warning about the impacts on tariffs. So for example, Pulte groups CEO, Ryan Marshall, told analysts and investors on Tuesday after their first quarter earnings, that he estimates that tariffs will impact their home prices by about $5,000. And he also estimated a 1% increase in construction costs in the back half of that, of the year. So, these added expenses are expected to come from a range of materials, so including plumbing fixtures, water heaters, porcelain, HVAC parts from China, tiling flooring, which is subject to a global 10% tariff. And so, electrical components like circuit breakers and load centers are also going to be impacted. So executives at Taylor Morrison also echoed the same concerns this week. The builder is forecasting housing inflation for the year to be in the low single digits due to tariffs on metals like aluminum. The US has imposed 25% tariffs on foreign imports of steel and aluminum. So these tariffs could affect prices for items such as HVAC systems, fireplace boxes, post-tension cables, and these cost pressures are expected to show up in the fourth quarter as they affect their upcoming housing starts.
So we got some new data out from realtor.com this morning, where they are seeing the highest housing affordability in some specific areas. Which areas and which regions?
Only 18 states offer affordable housing for medium earners, mostly in the Midwest and the South, and that's because of the construction boom. We saw that in Texas and Florida, even in California, North Carolina, Georgia, Arizona, and also South Carolina. So the dynamics really differ on the coasts where land is very limited, and people are paying a higher price for a home. So it was very interesting, I mean, you have to see the supply and dynamic, the supply and demand dynamics, and how that, you know, implicates everything. But if you are building more, then you have more to offer. And when you have less to offer, then those prices go up. So,
I'm going to load up that map after we finish this conversation to take a look at that grade per state here. Thanks so much for breaking this down, Danny.
No problem.
