Builder sentiment remains muted due to economic and geopolitical uncertainty, elevated mortgage rates, and rising construction costs. Builder confidence in the market for newly built single-family homes inched up one point to 35 in August, according to the most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
“Our latest builder survey continues to show signs of weakness in the homebuilding market,” said NAHB Chief Economist Robert Dietz. “August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40. Custom-home builders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders.”
The latest HMI survey revealed that 35% of builders cut prices in August, down from 37% in July, mirroring June. The average price reduction was 6% in August, the same rate as the previous month. The use of sales incentives was 63% in August, unchanged from the previous month.
Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The index measuring current sales conditions increased two points to 39, while the indexes for future sales expectations and prospective buyer traffic held steady at 43 and 23, respectively.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 44, the Midwest held steady at 45, the South fell two points to 31, and the West was unchanged at 27.
“While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” said NAHB Chairman Bill Owens, a homebuilder and remodeler from Worthington, Ohio. “Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the homebuilding industry, with new-home sales up in that region more than 2% so far in 2026.”
HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at Housing Economics PLUS.
About the National Association of Home Builders
The National Association of Home Builders (NAHB) is a Washington-based trade association representing more than 140,000 members involved in homebuilding, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing, and other aspects of residential and light commercial construction. NAHB is affiliated with 700 state and local homebuilder associations around the country. NAHB’s builder members will construct about 80% of the new housing units projected for this year.
/Wells Fargo Housing Market Index (HMI). ){kind=link}