NAHB Builder Sentiment Drops to 32 in September
Builder confidence fell to its lowest level since 2025 as mortgage rates and costs pressure sales.
Key points
- NAHB/HMI index fell to 32, the lowest level since September 2025.
- 38% of builders cut prices, with average reductions holding at 6%.
- 66% of builders used incentives, the highest share since December.
The NAHB Housing Market Index fell three points to 32 in September. This marks the lowest level recorded since September 2025, signaling deepening weakness in the single-family housing sector.
Higher mortgage rates and construction costs continue to suppress demand. Builders reported significant declines in both current sales and future expectations during the monthly survey period.
Sales metrics show broad weakness
Current sales conditions dropped four points to 35. Sales expectations for the next six months fell six points to 37, indicating a sharp deterioration in market outlooks.
Buyer traffic remained flat at 23, showing no improvement in prospective customer flow. This stagnant metric reflects persistent affordability barriers for potential homebuyers in the current economic climate.
Pricing strategies intensify to drive volume
Thirty-eight percent of builders cut prices, up from 35 percent in August. The average reduction stayed at 6 percent for the sixth consecutive month, highlighting persistent margin pressure.
Sales incentives reached 66 percent of builders, the highest share since December. This increase signals a strategic shift toward deeper discounts to maintain sales velocity and clear inventory.
Regional performance remains uneven
The Midwest index declined one point to 44, while the Northeast fell five points to 39. The South dropped one point to 31, showing consistent weakness across major residential markets.
The West was the only region to gain, rising one point to 28. This slight improvement contrasts with the broader national trend of declining builder confidence and reduced activity levels.
