Oklahoma Home Builder News

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association.

Following the Federal Reserve's interest rate cut in September — the first cut since last year — there was a slight rise in optimism among some prospective home buyers. However, macroeconomic uncertainty has increased in the last two weeks, which could offset that positive momentum. 

New Tariffs In Play 

The administration announced significant tariffs on furniture, bathroom vanities, cabinets and softwood lumber. For the newly announced section 232 lumber tariff, the rate is 10%, which is less than many experts anticipated. Moreover, unlike other section 232 tariffs that will rise in 2026, the lumber tariff will remain at 10%. 

However, for Canadian lumber, the new tariff stacks on top of the existing effective 35% duty, so the combined tariff/duty rate is effectively 45%. The combination of lumber and cabinet import taxes will have a particular effect on remodeling.

The effects of prior tariffs are beginning to take shape in the data. From the start of 2025, household furnishings prices increased at a 6.6% annualized rate — more than twice as fast as inflation. Some food prices, like coffee and bananas, are now rising significantly faster than general inflation. And trade conflicts are having other macro effects, such as the 50% drop in soybean exports from the U.S. to China over the course of 2025. The administration is preparing a bailout package of more than $10 billion to offset farm losses stemming from lost exports. 

Then, last week, China announced restrictions on rare earth exports. In response, President Trump announced an additional 100% tariff on Chinese imports, set to go into effect on Nov. 1. This tariff would have significant cost effects on consumer goods. However, markets are hoping for a resolution before the end of this month. 

Prevailing Economic Risks 

Adding to the uncertainty is the ongoing government shutdown. There was no Bureau of Labor Market Statistics labor market report for September. The most-watched non-government job data (from HR software provider ADP) indicates that the private sector lost 32,000 jobs in September. If the shutdown continues one more week, it will likely begin to have GDP and bond market consequences. 

On housing policy, President Trump and the Federal Housing Finance Agency (FHFA) director made social media comments regarding home building and lot supplies. The thrust of the comments focused on national builders’ lot inventories, with the implication that the pace of building should and needs to accelerate. (This assumes labor, materials, and other factors are ready to be deployed, and such building can be done profitably in today’s soft-demand environment.)  

Smaller builders operating in markets with large builders should be aware of this possible source of new supply and impact on pricing strategy. FHFA could help smaller builders via improvements to construction-to-permanent lending and investigating ways to enhance the acquisition, development and construction (AD&C) loan market. Lack of access to lots is a constraint for private home builders. And private builders dominate supply in secondary and tertiary building markets and rural areas.

With respect to overall macro conditions, the price of gold is sending possible warning signals, having increased 54% since December 2024. Investors typically seek gold as a hedge to future risk. In this case, it may be a hedge against future inflation or system risk. And with growing talk of an AI bubble, investors can hedge a future stock market downturn with gold. 

Nonetheless, the 10-year Treasury rate is approaching 4%. The average 30-year fixed-rate mortgage fell back to 6.3%, near the lowest in a year. Despite the uncertainty and macro risk — which can often be the costs for policy reforms — rates closer to 6% than 7% should help stabilize home buying demand.

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Oklahoma Natural Gas
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Registration- 8AM

Tournament- 9AM

Where: Silverleaf Shooting Sports (8513 S. Douglas, Guthrie, OK 73044)

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The following post is from The National Association of Home Builers.

The Senate on Oct. 9 passed NAHB-supported housing legislation that offers meaningful solutions to increase the nation’s housing supply by addressing key concerns around zoning and land-use policies, the aging housing stock, rural housing, and multifamily housing.

“NAHB applauds the Senate for passing a bipartisan housing package to fix the housing crisis by addressing our nation’s critical lack of housing supply,” said NAHB Chairman Buddy Hughes. “Building more homes is the only way to ease America’s housing affordability crisis, and the ROAD to Housing Act includes favorable provisions aimed at zoning and land-use policies, rural housing and multifamily housing that will stimulate construction of sorely needed housing.”

The ROAD to Housing Act directs the Department of Housing and Urban Development to develop best practices with key stakeholders, such as home builders and developers, to provide state and local governments with an array of options to increase housing production. Similarly, there is a provision to reward communities that welcome housing growth with more Community Development Block Grant funding.

The legislation also provides multifamily owners an opportunity to continue participating in the rural rental assistance program after their mortgages mature. On the single-family side, income derived from accessory dwelling units can now be used to qualify for the Section 502 Guaranteed Loan Program, which also relieves the original borrower of liability when their loan is transferred and assumed by a new borrower.

For multifamily builders, the legislation calls for a study and rulemaking process that will adjust Federal Housing Administration loan limits to better reflect the true cost of construction and facilitate more apartment construction.

The ROAD to Housing Act is a major legislative package that also includes other beneficial provisions for the housing industry.

“We look forward to working with Congress and President Trump to enact a bicameral, bipartisan housing package that addresses supply-side and regulatory issues that are acting as barriers to build more homes,” said Hughes.

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association.

Despite tax policy wins for housing and the construction industry, the single-family housing market has disappointed thus far in 2025.

Single-family builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), retreated in August to a level of 32. Builder sentiment has been in negative territory (a sub-50 reading on the HMI) for 16 straight months and stuck in a low range of 32 to 34 since May. The HMI’s buyer traffic reading remains very low at a level of 22, as elevated interest rates and construction/price growth has priced out many prospective home buyers.

Challenging affordability conditions continue to weaken single-family home construction in 2025. Single-family starts increased 2.8% to a 939,000 seasonally adjusted annual rate, but are down 4.2% on a year-to-date basis. The slowdown in single-family home building has narrowed the home building pipeline. There are currently 621,000 single-family homes under construction, down 1% in July and 3.7% lower than a year ago. This is the lowest level since early 2021 as builders pull back on supply.

However, multifamily development is benefiting from the low levels of for-sale inventory. The multifamily sector, which includes apartment buildings and condos, increased 9.9% in July to an annualized 489,000 rate and is on pace to post a larger than 10% gain for starts in 2025. Indeed, the NAHB Multifamily Production Index remains near a neutral reading, coming in at a level of 46 for the second quarter.

While soft, the housing market is being supported by a relatively stable economy that registered a 3% GDP growth rate in the second quarter and an unemployment rate near 4%. However, ongoing tariff uncertainty and anemic job growth continue to act as headwinds to the economy and housing sector. 

The CPI measure of inflation held steady at a 2.7% year-over-year growth rate in July. However, there were hints of tariff-induced inflation as the core goods inflation reading has now accelerated somewhat over the past three months. Residential construction building costs increased in July in the separate PPI data; however, this was not a tariff-related effect as the PPI data does not count tariff costs. Overall, such building materials were up 2.8% from a year ago.

The effects of tariffs on prices, while measurable, are smaller than those feared back in April (due to trade deals resulting in lower tariff rates). If such effects remain one-off changes and relatively minor, the remaining economic backdrop confirms that the Federal Reserve should proceed with additional rate cuts this fall. 

NAHB is forecasting two rate cuts before the end of 2025. Doing so will provide support for those parts of the economy, particularly housing, that have been dealing with persistently elevated interest rates. Such monetary policy action will be particularly beneficial for land development and construction loan financing. This market remains tight, with interest rates averaging 8%. Declines for the Fed-controlled federal funds rate will have a direct one-for-one impact on such loans and enable more affordable development.

HUD is currently taking public comments regarding requiring all homes receiving a HUD loan to meet IRC 2021 Energy Rules without any amendments. This would be detrimental to the overall cost of housing in Oklahoma and across the country. Here are few reasons why:

• Significant Upfront Cost Increases: Compliance with 2021 energy codes can add $5,000 to $20,000+ to the construction cost of a single-family home, depending on location and design, pricing many buyers out of the market.
• Disproportionate Impact on Affordable Housing: These codes impose uniform standards that don’t account for the limited margins of affordable housing projects, potentially making them financially unviable.
• Limited Return on Investment for Buyers: Many homebuyers, particularly low-income, will not see immediate or meaningful savings on energy bills to offset the added mortgage or rent costs.
• Barriers to Entry for First-Time Buyers: Increased construction costs raise down payments and monthly payments, blocking first-time and working-class families from homeownership.
• Minimal Emissions Impact in Some Markets: In regions already using cleaner energy or efficient homes, the incremental environmental benefits may not justify the economic burden imposed by strict code requirements.
• Discourages Small Builders and Rural Development: Smaller builders and rural developers often lack the economies of scale or resources to meet strict code demands, reducing rural housing options.

Thank you for taking time to help!

Ryan Martinez Executive Officer, OKHBA

Please click the link below to leave your comment! I have also included a draft comment that you can copy and paste into the comment section if you so desire!

Leave your feedback here!

Draft Comment Below:

I am writing to express serious concern regarding HUD’s potential requirement that new housing comply with the 2021 International Residential Code (IRC) energy provisions in order to qualify for HUD-insured loans. While I support energy efficiency and sustainability in principle, implementing this mandate without adequate consideration of cost implications would significantly increase the overall cost of housing, particularly for low and moderate income families—the very populations HUD is intended to serve.

According to industry estimates and recent analyses, the 2021 IRC energy code mandates can increase construction costs by thousands of dollars per unit, often without a clear or immediate return on investment for homeowners. These requirements include higher insulation standards, upgraded mechanical systems, and costly building envelope improvements that may not be feasible in all climates or economic conditions. For many builders and developers, especially those producing affordable housing, this added burden could reduce production and eliminate marginal projects altogether.

The unintended consequence of this well-intentioned rule may be a reduction in housing supply, increased home prices, and further restricted access to homeownership and rental opportunities—particularly in underserved rural and urban communities. It could also disproportionately affect first-time buyers and communities of color.

HUD’s role is critical in ensuring access to affordable, quality housing. Imposing costly new mandates without appropriate consideration could undermine this mission at a time when the country is already facing a housing affordability crisis.

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association.

The word thus far for the 2025 housing market is "disappointing." NAHB started the year expecting relatively flat conditions due to anticipated policy change that would implement much-needed tax policy certainty and regulatory reform. Instead, persistently elevated interest rates, ongoing challenges for housing affordability and weakening consumer confidence have moved many buyers to the sidelines. This reduction for housing demand comes as existing home inventory is rising, leading to a reduction in construction activity and growing reporting of home price cuts.

For example, the NAHB/Wells Fargo Housing Market Index (HMI) measure of home builder confidence came in at a level of 33 in July. While one point higher than June, the July reading marks the 15th straight report in negative territory. The traffic component of the HMI was 20 in July, the lowest reading since the end of 2022. Marking a record since NAHB began collecting this data in the post-Covid period, the number of builders implementing price cuts increased to 38% in the most recent HMI.

Consistent with these weak readings of builder sentiment, single-family housing starts declined 4.6% in June, dropping to an 883,000 seasonally adjusted annual rate. For the first half of 2025, single-family starts are down almost 7% compared to the first half of 2024. Weakness was seen in most regions, especially in the South where single-family construction is down 12% on a year-to-date basis. Countering this trend, single-family home building is up 10% for the first half of 2025 in the relatively housing affordability-advantaged Midwest.

The 2025 challenges for the for-sale housing market have boosted the outlook for the apartment development sector. Multifamily 5+ unit construction was up 30% in June, with this sector of the construction industry up more than 15% for the first half of 2025. With fewer home owners moving, the remodeling market continues with solid conditions. The NAHB/Westlake Royal Remodeling Market Index (RMI) came in at a positive level of 59 for the second quarter of the year, down year over year, but continuing a five-year trend of positive market readings.

Macroeconomic conditions continue a mixed trend as the summer progresses. Inflation picked up in June, with the CPI increasing to 2.7% -- a four-month high. Shelter inflation continued to decline, falling to a still elevated rate of 3.8%. Given that shelter inflation has been the leading source of inflation for more than two years, this data is a signal for the Federal Reserve to continue cutting the federal funds interest rate at its coming policy meetings. However, some evidence of tariff effects are appearing in the inflation, including gains for toys, apparel and some home furnishing goods.

While the recently enacted One Big Beautiful Bill Act provides some policy certainty and pro-growth tax cuts, uncertainty remains the challenge for macro conditions in 2025. The ongoing drama around tariffs is concerning for employers and employees in sectors reliant on imports and border states with regional economies dependent on trade. And the rising government debt levels, combined with uncertainty in international capital markets including issues regarding international buyer demand for U.S. Treasuries, have placed upward pressure on long-term interest rates. With mortgage rates stuck in a range near 7%, this remains the most pressing challenge for the housing market as we enter the second half of 2025.