HOUSTON — US home builder confidence remained in negative territory for the 20th consecutive month in December, even as sentiment showed a modest improvement, according to the latest survey from the National Association of Home Builders (NAHB).
The NAHB/Wells Fargo Housing Market Index (HMI) edged up to 39 in December, from 38 in November, but remained well below the 50-point threshold that separates optimism from pessimism among builders. Readings below 50 signal negative sentiment across the newly built single-family home market.
Builders cited three primary pressures continuing to weigh on confidence: rising construction costs, tariff and broader economic uncertainty, and persistent affordability challenges that are keeping potential buyers on the sidelines.
“Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence,” said NAHB chairman Buddy Hughes.
At the same time, builders are facing ongoing cost pressures tied to materials and labor. Tariffs have had “serious repercussions” on construction costs, Hughes said, adding that regulatory expenses and elevated material prices remain “stubbornly high” as growing housing inventory increases competition for newly built homes.
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Despite these headwinds, some forward-looking indicators showed improvement. The HMI component measuring future sales expectations has remained above the break-even mark for the past three months, suggesting a potential stabilization ahead. In addition, the recent easing of monetary policy could improve loan conditions for builders as 2026 approaches, according to NAHB chief Economist Robert Dietz.
Breaking down the December survey results, the index measuring current sales conditions increased one point to 42, while the gauge tracking future sales rose one point to 52. The index assessing traffic of prospective buyers was unchanged at 26, reflecting ongoing affordability constraints.
On a regional basis, three-month moving averages showed mixed results. Builder sentiment in the Northeast slipped one point to 47, while the Midwest climbed two points to 43. The South increased two points to 36, and the West recorded the largest gain, rising four points to 34.
Meanwhile, key housing supply data remains delayed. US housing starts and building permits figures for September, October and November have not yet been released due to the 43-day partial shutdown of the federal government, which ended on 12 November. The most recent data, for August, showed month-over-month and year-over-year declines in both starts and permits.
Labor conditions showed relative strength. The Bureau of Labor Statistics reported that construction employment rose by 28,000 jobs in November, bringing total employment to 8.33 million, with nonresidential specialty trade contractors accounting for 19,000 of those gains.
The housing sector remains a critical driver of demand for chemicals and related products, including plastic pipe, insulation, paints and coatings, adhesives, and synthetic fibers, making ongoing housing market trends closely watched across the broader industrial supply chain.
Originally reported by Stefan in ICIS.
