Major homebuilder Pulte Homes said it would increase home prices by $5,000 by year's end to combat tariff impacts, and it's just one of the country's largest builders planning to up prices.
This week, some of the country’s largest builders, that build a combined 80,000 residential units annually, reported varied expectations of tariff impacts on home prices. The National Association of Home Builders has reported tariffs could increase home prices by upward of $10,900, though that’s not near current expectations from select national builders. Pulte Homes specified a 1%, or $5,000 increase, while Taylor Morrison also projected a single-digit percentage price increase.
It’s another threat to housing affordability amid the historically high prices of new homes. The median sales price for a new home in the United States was $403,600 in March, according to data reported Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development.
Builders agree that today’s economic conditions, resulting from high interest rates, potential tariffs and stock market turbulence, have dampened a usually hot spring selling season. The economic uncertainty is igniting fears in consumers and keeping them from purchasing, the builders noted. In response, several have adjusted their expectations, dropping the number of new homes they plan to build in 2025 from prior quarter expectations and will continue offering incentives that lower monthly payments for buyers.
Here's what each one said about tariffs, home prices and impacted materials:
Pulte Homes: Home prices to increase $5,000
Homebuyers can expect home prices to increase by a few thousand dollars for Pulte in the latter half of the year. In its earnings call Tuesday, the second-largest homebuilder said the average sales price will rise by 1%, about $5,000, toward the end of the fourth quarter. It’s to offset tariffs and rising land costs, said the builder, that noted land is in short supply.
Atlanta-based Pulte leadership said tariffs will hit products such as tank water heaters, tile flooring, heating and cooling system parts, circuit breakers, load centers and other plumbing and electrical components. Supply chains will also be disrupted, causing potential construction delays.
“I do think the industry needs to be prepared, and not just the industry. The world needs to be prepared for some disruptions, as a result of things that are going on, tariff-induced,” Ryan Marshall, Pulte's president and CEO, said on an earnings call.
The builder’s average sales price in the first quarter was $570,000, up 6% from the previous quarter. Pulte’s customers include 39% first-time buyers, 40% move-up and 21% active adult.
Taylor Morrison: Single-digit price increases to come
Homebuilder Taylor Morrison found in a recent shopper survey that its buyers are concerned with tariffs, but it’s not a “significant” impact on whether or not to buy. The builder said single-digit percentage price increases would come toward the end of the year, and it’s seeing 10% hikes on metals, such as aluminum used in heating and cooling systems.
“That will not come through until Q4 because there are recent increases that’ll be going into some of our upcoming starts,” said Chief Financial Officer Curt VanHyfte on Wednesday’s earnings call.
The Scottsdale, Arizona-based firm is experiencing fringe impacts from the tariffs, even if it’s not directly tied to price, with uncertainty on economic stability keeping buyers at bay.
“More recently, the significant volatility in the stock market and additional policy-related changes have impacted buyers’ sense of urgency, causing some shoppers to move to the sidelines as we have seen before during periods of uncertainty,” said CEO Sheryl Palmer.
M/I Homes: ‘The sky is not falling’
Faltering consumer confidence is the biggest threat from tariffs today, said homebuilder M/I Homes on its earnings call Wednesday. Low confidence has pulled back buying activity, while prices for building materials for the Columbus, Ohio-based builder decreased year over year.
The builder said it will ensure its products do not rely on a single supplier to be flexible and focus on affordability for when tariffs do come, which will show in the fourth quarter. Half of M/I Homes customers are first-time buyers.
“The sky is not falling. And I said that earlier. And I think the stocks are trading at ridiculously low values, suggesting almost that this is trending towards some kind of recession or great recession, which I just don’t subscribe to that at all,” said Chief Financial Officer Phillip Creek.
Century Communities: 'No meaningful increase'
Greenwood Village, Colorado-based Century Communities stated that the majority of its products will not be subject to tariffs, helping to limit the impact tariffs will have on home prices for its target first-time buyers.
"While the situation is obviously fluid at this time, we are not expecting to see a meaningful increase in our direct cost in the near term," said Executive Chairman Dale Francescon on Wednesday's call.
"The majority of products we purchase are either made in the U.S. or are currently exempt from tariffs," said Francescon. Those exempted products fall under the United States-Mexico-Canada Agreement that went into effect in 2020. That trade deal exempts an import from tariffs if most of its production is done within North America. The builder also noted having price protection agreements with suppliers to mitigate increases.
Century Communities' average sales price for its homes decreased 1.3% compared to one year ago, dropping to $414,200. It pulled back its production expectations from between 11,700 and 12,400 homes down to between 10,400 and 11,000.
Tri Pointe Homes: Tariffs won't change price structure
Despite double-digit declines in first-quarter home sales and net new home orders, Incline Village, Nevada-based Tri Pointe Homes said it is positioned to weather tariff and trade tensions hurting buyer confidence.
"We do not believe tariffs will have a material impact on our cost structure in 2025," CEO Doug Bauer said on Thursday's conference call with analysts.
The company sold 1,040 homes in the quarter, down 25% from the same period in 2024, while its 1,238 net orders plunged 32% from the prior year. Still, Tri Pointe posted a 5% increase in average sales price at $693,000.
Assigning the housing market a letter grade, Bauer said it's a C or a C+, but the company was happy with the first-quarter results, given market conditions. The nation's long-term housing shortage and strong demographics for new homes should put builders in good position within two or three years, according to the CEO.
"Before you know it, we'll all get through this," he said.
Meritage Homes: Economic uncertainty doesn't affect guidance
Unlike other builders, Meritage Homes, based in Scottsdale, Arizona, is maintaining full-year guidance of increases in home sales and revenue, despite tariff-induced economic uneasiness.
The company said it expects to sell 16,250 to 16,750 homes, up from 15,611 in 2024, while it projects revenue of $6.6 to $6.9 billion, compared to $6.3 billion last year. Still, first-quarter home sales, revenue and orders all declined from the same period a year earlier.
"As we sit here today, we haven't layered any tariffs into our forecasts because we don't have any cost increases that have been delivered to us in certainty," CEO Phillippe Lord said on Thursday's conference call. "There's been a lot of communication from our vendors about what might come or what might not come, so we're waiting to see. But I think we're very confident right now in our ability to kind of navigate that cost environment."
Meritage said it believes it has a deep buyer pool and that hesitation to commit is the result of consumers waiting to feel confident in the economy rather than their inability to afford monthly payments.