VOL 2024 ISSUE 11
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VOL 2024 ISSUE 11
BUILDERSOUTLOOK
PUBLISHED BY THE EL PASO ASSOCIATION OF BUILDERS : NATIONAL , STATE AND LOCAL HOME BUILDING INDUSTRY NEWS
Post-Election Economic Outlook
2025
The dramatic election victory for President-Elect Donald Trump and congressional Republicans reshapes the outlook for the housing sector and the overall economy . For example , equity / stock markets loved the result , expecting an improved regulatory environment and significant — if not , total — extension of the 2017 tax reform policies . However , the bond market has deep concerns , with investors dumping bonds and pushing the 10-year Treasury rate from 3.6 % in mid-September to near 4.3 % at the end of last week . Bond investors are concerned about possible inflationary impacts from a larger federal government deficit and a move to tariffs . And while the incoming Trump administration has been clear that deportation will be used to deal with illegal immigration , the scope and scale of this policy is unclear . It remains a significant wildcard for the economic outlook , with potential impacts on housing demand , labor supply and border issues . Greater clarity on all of these policy issues will be gained as
Trump names key officials to staff his new administration in the coming weeks . In the meantime , the rise in long-term interest rates has had a direct impact on the mortgage market . Counter to most forecasts , including NAHB ’ s , the average interest rate for a 30-year mortgage has increased from below 6.1 % in mid- September to almost 6.8 % last week . While this represents a significant hit to housing affordability , macro conditions remain solid . U . S . GDP expanded at a 2.8 % annualized growth rate in the third quarter , albeit lower than the 3 % rate from the second quarter . The labor market is showing signs of strain . After some of the most significant job market data revisions in more than a decade , October job growth totaled a meager 12,000 in part because of major hurricanes and labor strikes . The unemployment rate was steady , at a low 4.1 % reading . Home builders and remodelers lost 5,300 jobs in October as residential construction activity slowed , particularly in the apartment development sector . Over the last year , residential construction has added just 44,500 jobs . The total number of open , unfilled construction jobs declined to just 288,000 in September — another sign of weakening demand for construction labor . We will get a reading of single-family builder confidence in just under a week , which will help get a sense of how builders are viewing market conditions over the next six months . Apartment developers continue to report mixed sentiment regarding the market . The latest NAHB Multifamily Production Index decreased four points from the previous quarter to a weak reading of 40 , indicating more apartment builders are facing poor market conditions . However , the third quarter reading was two points higher than a year ago , suggesting the multifamily construction market could potentially stabilize later in 2025 . But the multifamily outlook , along with other housing and economic indicators , contains more uncertainty until the election results are finalized and what policies Trump intends to pursue at the start of his second administration .