By coinnews 
00:00 Speaker A
You know, Jim, so Fed Head Jay Powell today was speaking. He was talking about the Trump tariffs, Jim. He’s talking about how, listen, that could very well mean higher inflation. It can mean slower growth. I’m curious, Jim, when you think about these tariffs, how are you thinking about them for the home builders, Jim? What are the implications, the ripple effects you’re looking for?
00:37 Jim
Good afternoon. Thanks for having me. Uh, I think the ripple effects are yet to be seen, but we’re anticipating higher prices. Uh, we saw our HMI, which is the NHB Wells Fargo Home Housing Market Index, go up only one point this month to a reading of 40. That’s still well below the break-even point of 40. Uh, and when we we survey the the builders on this, uh, they’re already seeing price increases up to 6% from their suppliers, which translates into over $10,000, almost $11,000 in increased costs when it comes to building a new home. So we we also view the tariffs as inflationary, uh, and I don’t think we know the full impact yet.
02:01 Speaker A
And Jim, what do you think is the way out of this for builders, right? There was a sentiment survey out there, 29% of builders said that they’re going to have to cut home prices because of the, you know, tariffs and and spending and things like this. But how do builders get out of this? What is their future for the next nine months with tariffs coming in?
02:42 Jim
Well, I I think it’s going to have to be a lower mortgage rate environment. You know, I think the reading that, you know, our our HMI went up one point this month and we think that’s largely due to that dip in mortgage rates we had a couple of weeks ago. So if we can see a quick clear of the bond market starting to settle down, uh, and hopefully bring, uh, mortgage rates back down into, you know, closer to six and a half, I think some people will begin to come off the the sidelines. That said, it really is market to market. I was just in Florida this week visiting our builders down in the panhandle, and they’re doing very well. They are money is flowing, people are coming down there to buy homes, and home construction is booming. But yet, when I talked to our builders in Milwaukee, Wisconsin, border state, a lot of trade comes across those borders from Canada, uh, they’ve seen the market kind of swing both ways, people pulling out of the market, not wanting to buy a home or start a home, uh, but then yet coming back in over the last couple of weeks saying, well, maybe now is the time. So it’s it’s uncertainty is the word of the month and probably the word of the next couple of months when it comes to home building home building in this country.