Homebuilding Bounces Back But Trump’s Tariff Hammer Looms

Single-family homebuilding bounced back in November after a hurricane-induced slump, with starts jumping 6.4% to a seasonally adjusted annual rate of 1.011 million units. The South carried the weight, rebounding 18.3%, while the rest of the country basically phoned it in. Multi-family starts however, were a disaster, plunging 24.1% to their lowest level since March.

Zooming out, the overall housing market is stuck in a chokehold. Permits for future single-family homes barely ticked up 0.1%, and housing starts are down 14.6% from a year ago. Builders are still reeling from near-7% mortgage rates which remain stubbornly high despite the Fed’s rate cuts, and a potential Trump-shaped storm cloud brewing overhead.

The President-elect’s plans to slap 25% tariffs on Canadian lumber (and just about everything else from north and south of the border) could send building costs soaring. Throw in mass deportations of undocumented workers, and labor shortages could hit builders where it really hurts. But for now, those builders are putting on a brave face. Homebuilder sentiment is riding a seven-month high, buoyed by hopes that Trump’s deregulation promises will ease some pain. But economists are less optimistic, reiterating their warning that any trade or labor disruptions could rip the rug out from under the recovery.

So while November’s rebound looks good on paper, the housing market is walking a tightrope. Between pricey mortgages, skyrocketing costs, and shaky policy signals, 2025 is shaping up to be anything but a builder’s paradise