The spring home-selling season is shaping up to be challenging for major homebuilders, largely because of the possibility of a trade war and high mortgage rates.
Over the past few years, homebuilders have rushed to build new houses to help alleviate the shortage in the resale market, as high borrowing costs discouraged homeowners from selling. But now, with mortgage rates still elevated and economic uncertainty, builders are facing obstacles.
“We expect the challenging environment for homebuilders to persist through [first half of 2025],” Rafe Jadrosich, homebuilders and building products analyst at Bank of America Securities, wrote in a note to clients.
The cracks have started to show.
For instance, DR Horton (DHI), the nation’s largest homebuilder, reported a 1% decrease in net orders for the first fiscal quarter ended Dec. 31 compared to the same period last year….
