Cost and Tariff Uncertainty Weighs on Market
NAHB Chief Economist Robert Dietz provided this economic and housing industry overview in the bi-weekly newsletter Eye On the Economy.
The uncertain timing and scale of tariffs, combined with the last legs of the fight against inflation, have rattled financial markets. Equity markets are in correction territory as investors react to a flurry of public finance proposals, including the largest proposed tariff hikes since World War II. However, improved clarity is on the way, as President Trump indicated that details concerning reciprocal tariffs will be announced on April 2.
Moreover, efforts to extend the 2017 tax cuts are well underway on Capitol Hill, and the administration has made moves to reform burdensome regulatory rules, including FHA-financing related energy code requirements and the WOTUS rule. These are positive developments for the housing outlook.
As a result of these crosswinds, bond markets are in a holding pattern. The 30-year fixed-rate mortgage remains near 6.6% and the Federal Reserve held its policy rate after its March meeting, as expected.