Flagging economy hurts U.S. housing market: report

NEW YORK, May 5 (Xinhua) -- The faltering economy of the United States is starting to become a drag on the housing market: slower growth -- the economy shrank at the beginning of 2025 -- means interest and mortgage rates will probably stay high for the foreseeable future, reported The Washington Post on Monday.

"Stock market swings and flagging consumer confidence are pushing buyers out of the market. President Donald Trump's trade war is adding thousands to construction costs for new homes and remodels," it noted.

"Markets work because people have price knowledge, and they have those prices to make decisions," Robert Dietz, chief economist at the National Association of Home Builders, was quoted as saying. But so much uncertainty, Dietz said, is creating a "wait-and-see economy."

Existing-home sales in March saw their biggest monthly drop in more than two years, falling almost 6 percent during what is normally the spring selling season. Construction spending fell broadly in March. And housing starts fell more than 11 percent, according to government data, with borrowing costs and a tight labor market slowing new construction.

"Trump's global trade war is also stifling builder sentiment after it rallied post-election," the report cited survey data. "Sixty percent of builders said their suppliers have already increased or announced increases on materials prices because of tariffs. All told, builders are estimating a typical cost bump of almost 11,000 U.S. dollars per home." Enditem