US: Housing Market Index

Highlights

U.S. homebuilder sentiment took a step back this month, falling to its lowest level in a year – as elevated borrowing costs and the cloudy economic outlook continues to dampen demand, while builders struggle with rising costs and tight labor conditions.

Builder confidence in the market for newly built single-family homes was 32 in September, down from 35 in August and matching 32 in September 2025. This is below the consensus expectation for 34 in the Econoday survey of forecasters.

The housing environment remains challenging.

“Buyer traffic has weakened across much of the country, largely because of rising mortgage rates,” the NAHB said. “Builders also continue to face higher material costs, rising gas and diesel prices and persistent labor shortages.

“In some markets, builders report that increased immigration enforcement is discouraging legal workers from reporting to job sites,” it added.

Tight lending conditions as well as persistently elevated land, labor and construction costs create additional pressure.

Thirty-eight percent of builders surveyed said they slashed prices in August. This compares with 35 percent in August and 37 percent in July. Thirty-seven percent cut prices in May 2025.

The average price reduction was 6 percent in September, the same as in August. The use of sales incentives was 66 percent, up from 63 percent in August and the highest since December 2025 (67 percent). This is the 18th consecutive month this share has been 60 percent or higher.

Market Consensus Before Announcement

Homebuilder sentiment expected to erode to 34 in September from 35 in August.

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