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Tariffs Could Make Buying a Home More Expensive. Builder Stocks Are Down. - Barron's

1. Tariff fears cause home construction stocks to fall 2%-3.3%. 2. 25% tariffs on lumber may lower builders' margins by 200-300 basis points. 3. Increased construction costs could raise home prices, impacting sales. 4. Supply chain issues may emerge, similar to 2022 challenges. 5. Higher mortgage rates conflict with already high prices, affecting buyer affordability.

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FAQ

Why Bearish?

Increasing tariffs will raise construction costs, directly impacting DHI's profitability. Similar past tariff announcements have led to declines in builder stocks.

How important is it?

Tariffs on essential materials could significantly affect construction costs and overall market sentiment towards DHI.

Why Short Term?

Immediate effects from tariffs will create short-term pressure on DHI prices. Past instances show quick market responses to tariff news.

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