PUBLISHED BY THE EL PASO ASSOCIATION OF BUILDERS: NATIONAL, STATE AND LOCAL HOME BUILDING INDUSTRY NEWS

A global trade war is underway, causing For financial markets, the 10-year

While we expect distress as trade flows significant economic and financial market Treasury rate is settling at near 4.5 %, as from China are interrupted, it is important disruptions. As initially announced, the U. S. an additional risk premium for U. S. to recall recent data that showed solid imposed trade sanctions including a 10 % government debt is imposed by investors. economic momentum. Inflation data minimum tariff rate on virtually all U. S. The rate has also increased due to surprised to the good side for March: The trading partners, combined with higher expectations for higher inflation in 2025. Consumer Price Index measure of inflation“ reciprocal” tariff rates— which were, in Separately, duties on Canadian lumber are slowed to a 2.4 % year-over-year rate, with fact, taxes on bilateral U. S. goods deficits set to rise from 14.5 % to 34.5 % later this shelter inflation slowing to 4 %. Absent the rather than tied to specific foreign tariff or year. trade war, these data would have set the non-trade-based rules. However, even Treasury rates are worth watching in the Federal Reserve on pace for additional those rates were four times higher than weeks ahead. There remains a liquidity risk short-term interest rate cuts. And while they should have been, given the equation if a significant portfolio reshuffling occurs. overall producer prices fell in March, the specified. It appears these higher rates Such liquidity risks can produce significant prices for residential construction materials were designed as leverage for financial and economic distress. However, rose just 1.3 % year over year. negotiations. the bond market appears orderly, for the And despite recent government job cuts, As these rates were set to apply on the time being. The other risk for bonds, the economy created 228,000 jobs in evening of April 8, financial markets including mortgage-backed securities and March, with home builders and remodelers shuddered. The 10-year Treasury rate mortgage interest rates, remains a political adding 13,000 positions. The job openings spiked to 4.5 %, alarming investors as a retaliation via a large-scale sale of foreignowned debt. Such an action would spike 242,000.

count for construction remained low, at just bond market repricing occurred. On April 9, President Trump set a general 90-day interest rates.

Also, NAHB Remodelers continue to pause on the applicable reciprocal rates Although the negotiations may yield report relatively good market conditions.( leaving in place the 10 % baseline tariffs growth opportunities for U. S. energy firms The NAHB Westlake / Royal Remodeling on all countries except for Canada and and other exporters, most forecasters are Market Index declined five points in the Mexico), subject to bilateral trade now saying a recession is more likely than first quarter, but fell to an otherwise negotiations. not for 2025. NAHB’ s forecast for GDP positive reading of 63. NAHB is bullish on However, this pause also excluded growth in 2025 has been revised lower to the future of the home improvement sector China, which is now subject to a prohibitive near 1 %, with flat readings for several for a variety reasons, including an aging( perhaps a virtual trade embargo) 145 % quarters as we believe negotiations and housing stock. New NAHB research finds tariff rate. This rate will disrupt supply carveouts will continue. Our probability for that almost half of owner-occupied homes chains for Chinese goods, raise prices for a 2025 recession is a smaller, one-in-three were built before 1980. these items, and cause financial market chance. Nonetheless, we expect inflation repricing. Recognizing this risk, an to rise in the quarters ahead above a 3 % NAHB Chief Economist Robert Dietz provided this economic and housing industry overview in the biweekly newsletter Eye On the Economy. exemption of this tariff was set on Friday of annual rate and for the unemployment rate last week for computer chips and other to approach 5 % as a growth slowdown electronic items. occurs.

2025Issue4 BuildersOutlook 9

MAY 7TH BOARD MEETING 11:30 EPAB OFFICE

TOP GOLF MIXER JUNE 18TH

CHRISTOPHER WALL, PE CONTACT: CHRISTOPHER WALL 1183 UPPER CANYON PL. 903-752-1598

Our sincere condolences to the family & friends of Dean Moore from Sun City Winnelson.

325 N. Americas Ave, El Paso, TX 79907 915-859-9171 brick. com / elpaso

Total Customer Satisfaction

Showroom: 9400 Gateway East ■ El Paso, TX ■ 79907( 915) 593-1301 ■( 800) 356-9546 www. efbmi. com