Builder confidence stuck in negative territory as market pressures mount

Posted By: Steve Barnes November 18, 2025

ConDig (18-Nov-25) Builder confidence remained weak in November as market uncertainty, the recent record-long government shutdown, tariffs, and rising construction costs continued to weigh on homebuilders, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

The index inched up one point to 38, remaining well below the breakeven level of 50 that signals positive sentiment.

NAHB chairman Buddy Hughes said that while recent declines in mortgage rates have helped ease affordability pressures, buyers remain cautious.

“Many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation,” Hughes said. 

“More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence.”

Builders are increasingly relying on incentives to spur sales. The November survey found:

  • 41% of builders cut prices, the highest share since the pandemic era and the first time the figure has exceeded 40%.
  • The average price reduction held at 6% for the second month in a row.
  • 65% of builders used sales incentives, matching levels seen in September and October.

NAHB chief economist Robert Dietz pointed to weakening demand conditions.

“A softening labor market and stretched consumer finances are contributing to a difficult sales environment,” Dietz said. “After a decline in single-family housing starts in 2025, we expect a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”

Among key HMI components:

  • The index measuring current sales conditions rose two points to 41.
  • Future sales expectations fell three points to 51.
  • The gauge tracking prospective buyer traffic edged up one point to 26, reflecting persistently low showroom activity.

Regional three-month moving averages showed mixed sentiment:

  • Northeast: up two points to 48
  • Midwest: down one point to 41
  • South: up three points to 34
  • West: up two points to 30

The HMI, based on a survey NAHB has conducted for more than 40 years, indicates that homebuilders continue to face a challenging sales environment heading into the end of the year.