Builder confidence in the U.S. single-family housing market declined in September as higher mortgage rates, construction costs and labor shortages continued to pressure residential development conditions. The NAHB/Wells Fargo Housing Market Index fell three points to 32, its lowest level since September 2025.
The monthly index measures builder perceptions of current sales, expected sales over the next six months and prospective buyer traffic. A reading above 50 indicates that more builders view market conditions as good than poor.
The September survey showed declines across two of the three HMI components. The index measuring current sales conditions fell four points to 35, while the measure for sales expectations over the next six months dropped six points to 37. Buyer traffic remained unchanged at 23.
Builders also continued to report challenges related to material prices, fuel costs, labor availability and financing conditions. NAHB reported that 42% of builders rated current lot availability as poor, while another 38% considered it fair.
The September survey pointed to continued use of pricing strategies to support new-home sales. Thirty-eight percent of builders reported cutting prices, up from 35% in August. The average reduction remained at 6% for the sixth consecutive month.
Sales incentives were also more common. Sixty-six percent of builders reported using incentives in September, compared with 63% in August. The September share was the highest since December, when 67% of builders reported using incentives.
Regional results also varied. The three-month moving-average HMI declined one point in the Midwest to 44, fell five points in the Northeast to 39 and dropped one point in the South to 31. The West was the only region to post an increase, gaining one point to 28.
The September HMI data indicate that residential builders are continuing to navigate elevated financing and construction costs while responding to weaker buyer traffic. Increased price reductions and sales incentives could affect project-level revenue assumptions and development strategies as builders work to maintain demand.
The latest reading also comes as single-family construction activity remains sensitive to affordability and financing conditions. NAHB's September survey provides a monthly indicator of how builders are assessing current market conditions and the near-term sales environment.
Source: NAHB.
