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High interest rates and uncertainty surrounding President Donald Trump’s plans for tariffs and mass deportations are biting into demand for US home improvements, the latest signs of a tepid housing market.
Shares of Jeld-Wen Holdings, which sells residential doors and windows, tumbled 6 per cent on Friday to a record low of $5.50. In an earnings report last month, the company forecast revenues would drop 4 to 9 per cent for 2025 compared with last year.
The shares sank despite chair David Nord buying $119,000 of the company’s stock this week, a move often seen by investors as a sign of confidence.
Shares in AO Smith and BlueLinx, which sell water heaters and plywood respectively, have also dropped to the lowest levels since late 2023. Earlier this year, AO Smith forecast flat to modest sales growth for 2025, while BlueLinx warned about continuing uncertainty over the timing of a sustained housing recovery.
Comprising about 4 per cent of US GDP, residential remodelling and home construction have been hit hard by the Federal Reserve’s decision to keep interest rates higher for longer. Now, the Trump administration’s tariff threats and attacks on undocumented workers have added new stresses to the market.
“It has been tepid for a while now really since the Fed began raising rates, and I also think the consumer is pretty conservative right now,” said Nicholas Fink, chief executive of Moen’s parent company Fortune Brands.
The company said in its most recent annual report that tariffs and retaliatory tariffs could increase raw material prices.
Fortune Brands’ share price is down 21 per cent over the past 12 months. Sales in its water division, which includes Moen, were flat last year and organic sales, excluding China and US hurricanes, were down 2 per cent.
Pending home sales fell to an all-time low in January, the National Association of Realtors said last week. Stubbornly high mortgage rates continued to spook buyers, it said, adding that mortgage rates remain nearly 7 per cent across the US.
Home Depot, the nation’s largest home improvement retailer, reported a return to growth in same-store sales in its latest quarter, but management forecast a weak 1 per cent rise for 2025.
Higher interest rates have kept homeowners from selling or taking out loans to finance big remodelling projects.
Trump’s eagerness to deport undocumented workers poses a particular threat to the construction industry. While no one knows how many undocumented workers are in construction, ISI Evercore estimated in December that the total was at least 15 to 20 per cent.
“Absolutely some of the activity around deportations is a risk for this sector,” said Kurt Yinger, a vice-president at DA Davidson.
Worries about immigration enforcement officers taking away construction crews, “creates more of the risk that the following day a couple siding crews don’t show up”, he said.
“Things like that could add to what is already not expected to be a super-robust demand year” for housing, he added.
BlueLinx said in its annual report this year that labour shortages “due to immigration enforcement activities” pose a risk.
“Anything we do to increase the cost of home ownership I think is going to be counter-productive,” said chief executive Shyam Reddy.
Additional reporting by Gregory Meyer
