Podcast: What's Ahead for New and Existing Housing Markets

On the latest episode of NAHB’s podcast, Housing Developments, COO Paul Lopez is joined by NAHB Chief Economist Dr. Robert Dietz and Realtor.com Chief Economist Danielle Hale to delve into the good, the bad and the ugly of today’s housing market.

The Ugly: Federal Government Shutdown

The biggest news this week has been the shutdown of the federal government. Although it’s not new territory, as shutdowns have occurred previously, it does contribute to the uncertainty that has been hampering the market and has the potential to be prolonged.

“Thus far, the bond market seems to be handling it well,” Dietz observed. “That’s been kind of a theme of the overall economy thus far, that the risk factors haven’t had as big an effect on the economy.”

“So we’re just going to have to wait and see,” he added.

Unfortunately, that delay is includes a lack of data reporting, including the anticipated Oct. 3 jobs report, which helps inform policy-related entities such as the Federal Reserve.

“We’re at a very critical point right now,” Hale stated. “The Fed has just started recalibrating policy. They want to be data dependent, but right now, they’re flying blind. They don’t have the data, and it’s unlikely that we’re going to have that data anytime soon.”

The Fed’s recent rate cut had begun to ease some of the uncertainty in the market, with at least one more cut forecasted by the end of the year. But such cuts need to be done in a managed, orderly process, Dietz noted, which is hard to do without all the data.

The Bad: Tariffs

Just prior to the government shutdown, the Trump administration imposed a 10% tariff on all timber and lumber imports and an additional 25% tariff on kitchen cabinets, effective Oct. 14, with higher rates slated to go into effect at the start of 2026. These are on top of the existing anti-dumping and countervailing duties announced earlier this year.

“We’ll be watching the lumber market in terms of pricing,” Dietz noted. “It has the potential to add several thousand dollars to the price of a typical newly built home.”

“Where I’ve heard more concern is in remodeling,” he added. “With the bathroom vanities, upholstered furniture, kitchen cabinets, we could see some significant increases in the price of that. So it will be interesting to watch whether that affects remodeling demand.”

NAHB continues to survey members to measure the impact of tariffs on the housing market and monitor market indicators. Overall, the market seems to be absorbing the impact for now.

“The question is whether these are short-term measures that will give way to long-term pressures in 2026,” Dietz stated. “Hopefully we keep the deals going. Most economists would agree that fewer tariffs are better, but looking for fair trade is a political outcome as well.”

The Good: Market Growth

Realtor.com recently released its 2025 Top New-Construction Metros report as part its partnership with NAHB to “Let America Build.” The top 10 markets are primarily in the South, with a few outliers in other regions.

The study looked at the following factors to determine its list:

• New-construction share of listings: Availability of new construction
• New-construction premium: Cost of new construction relative to existing construction
• Climate risk difference between new and existing homes
• Hotness of new-construction market: How in demand new construction is compared to other homes on the market

One of the outliers — Madison, Wis. — is part of the up-and-coming Midwest, which saw growth in single-family home building in 2025 that is likely to continue into 2026.

“It’s really a story of housing affordability,” Dietz observed, which is being boosted by job growth, including a potential uptick in manufacturing and investment in AI data centers.

More economic forecasts for builders are available in the full episode below or wherever you receive podcasts. Dietz and Hale will also be on hand at the 2026 International Builders’ Show in Orlando, Feb. 17-19, to share their insights.

Check out past episodes on YouTube.