National Association of Home Builders CEO Jim Tobin unpacks new housing data, the biggest ‘challenge’ in the US market and how Trump’s policies could improve the regulatory environment.
As a big gray cloud looms over American real estate, the CEO of one of the largest trade associations is revealing what could cause it to spill over into the market.
“We had a better regulatory environment three or four years ago. We had this boom after COVID, people were looking to buy new homes and our industry was doing great,” said the CEO of the National Association of Home Builders (NAHB ), Jim Tobin on Wednesday in ” Varney & Co.”
“The challenge we have now … inflation is absolutely the driver,” he continued. “People are pulling out of the market because they don’t want to have a seven-handle mortgage, especially when they’re sitting on a 3% or 4% mortgage.
“This is the No. 1 market killer right now.”
US CITIES WITH THE MOST HOMES UNDER $200,000
The housing market index, which is reported by NAHB and Wells Fargo and asks respondents to rate market conditions, fell to a reading of 43 in June, down two points from the previous month and the lowest reading since beginning of 2024.
National Association of Home Builders CEO Jim Tobin warned of the “No. 1 market killer” at Varney & Co. (Fox News)
Additionally, a recent report from Freddie Mac found that most homeowners who are locked into historically low mortgage rates are happy to stay in their current homes, with the exception of millennials. On June 18, the interest rate on a 30-year fixed rate mortgage was just over 6.7% and the 15-year fixed rate was 6%.
Housing costs were once again the biggest driver of inflation last month, accounting for more than two-thirds of the total monthly increase, according to May’s consumer price index (CPI). Rental costs rose 0.4% for the month and are up 5.3% from the same time last year. Rising rents are worrying because high housing costs affect household budgets more directly and acutely.
“Housing inflation is the biggest problem with deflation,” Tobin said. “We’re kind of stuck in the bottom three with inflation, but shelter inflation is over 5%.
Real estate agent Kirsten Jordan breaks down the struggles facing homebuyers and shares her predictions for the housing market in ‘Cavuto: Coast to Coast.’
For home builders, construction financing carries an interest rate of around 12% to 13%, the CEO claimed.
“We have local regulatory costs [that] they are absolutely killing our members because of the delays. And finally, regulatory burdens at the federal level are also deadly,” he noted.
Tobin also weighed in on whether a Trump or Biden victory in November is better for U.S. real estate.
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“We saw a lower regulatory environment under President Trump. We saw more output from the economy in the housing segment. So I expect more of the same if President Trump is re-elected,” Tobin noted.
“On the other hand, President Biden … has pushed a lot of pro-build policies. He’s talked about adding more supplies. But we’re getting this mixed message from this White House.”
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FOX Business’ Megan Henney contributed to this report.
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