The housing market is stalling, and homebuilder stocks are feeling the pain.

The S&P Supercomposite Homebuilding Index is down 21% year-to-date, on track for the biggest annual drop since 2008, when it fell 32%. That's even with tax cuts, unemployment near the lowest since 1969 and a real-estate developer in the White House. What gives?

Investors are increasingly worried about what JPMorgan Chase & Co. calls a "fairly tepid" housing recovery. New-home inventory is rising but getting increasingly expensive amid labor shortages, rising interest rates and higher commodities costs — linked partly to tariffs, such as those on imported steel.

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