Economic uncertainty, coupled with rising building material costs and interest rates, resulted in a sharp decline in builder sentiment in April as the housing market enters into the heart of the spring buying season.
“The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market,” said NAHB Chairman Bill Owens, a homebuilder and remodeler from Worthington, Ohio.
Builder confidence in the market for newly built single-family homes fell four points to 34 in April, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the lowest level since September 2025.
“With oil prices higher in the U.S., 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” said NAHB Chief Economist Robert Dietz. “Energy costs make up approximately 4% of residential construction material input and service costs. With near-term economic risks elevated, 70% of builders reported challenges pricing homes given uncertainty about material costs.”
The latest HMI survey also revealed that 36% of builders cut prices in April, down slightly from 37% in March. The average price reduction was 5%, down from the 6% figure in March. The use of sales incentives was 60% in April, down from 64% in March but marking the 13th consecutive month that this share has reached 60% or higher.
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.
All three of the major HMI indices posted losses in April. The HMI index gauging current sales conditions fell four points to 37 from March to April, the index measuring future sales dropped seven points to 42, and the index charting traffic of prospective buyers posted a three-point decline to 22.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 42, the Midwest dropped two points to 41, the South held constant at 35, and the West fell three points to 29.
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.
