Builder sentiment fell sharply in February over concerns on tariffs, elevated mortgage rates and high housing costs. Builder confidence in the market for newly built single-family homes was 42 in February, down five points from January and the lowest level in five months. …While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations. Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023. With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has builders further concerned about costs. …The HMI index gauging current sales conditions fell four points to 46, the component measuring sales expectations in the next six months plunged 13 points to 46, and the gauge charting traffic of prospective buyers posted a three-point decline to 29.