US homebuilders have slipped amid fears of higher prices and Trump tariffs.

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Shares of U.S. homebuilders fell on fears that interest rates will remain low for longer, adding to concerns that President-elect Donald Trump’s potential tariffs and mass deportations will increase construction costs.

After Trump won the election in November, the S&P 500 homebuilding index fell 17.3 percent to its lowest level since July. U.S. metal manufacturers and furniture groups suffered their worst sales losses in two years since the outbreak.

DR Horton, America’s largest homebuilder, fell 17 percent in the two months following Trump’s victory. Homebuilding giants Lennar and Pulte Group lost 21 percent and 15 percent over the same period. The three homebuilders have a combined market cap of $76 billion.

In the year The declines marked the sharpest change from three quarters last year, as homebuilders’ shares soared when interest rates hit their highest levels since 2001.

Although the average 30-year mortgage rate remained above 6 percent at the end of last year, a series of rate cuts by the Federal Reserve since September has further boosted the homebuilding sector.

But production of new and finished homes built after the pandemic began to weigh on supply, according to data from the Reserve Bank of St. Louis. Slow down last year Number of houses under construction.

Sentiment among investors has worsened, particularly in the past two months. “His[Trump’s]policies, price speculation, inventory increases . . . In the US, UBS Wealth Management analyst Jonathan Woloshin said the situation on the ground has certainly changed compared to a year ago.

Forecasts released by the Fed in mid-December showed interest rates falling less than previously expected in 2025. Analysts and companies alike worry that Trump’s “America First” policies could raise costs, from building materials to access to labor.

Trump has promised to deport millions of immigrants. More than a quarter of the construction workers are immigrants and 13 percent of workers are unauthorized.The largest share of any sector, according to data from the US Census Bureau.

In December, Barclays downgraded DR Hortons, PulteGroup and KB Home, writing in a note to clients that a mix of tariffs on key building materials including steel – as well as immigration restrictions and rising furniture prices – meant lower interest rates for homebuilders. . . It’s full of obstacles.”

Barclays analyst Matthew Bulley said the construction market has now hit a ceiling.