Builder Confidence Elevated Barely in November, Destructive territory for 19 consecutive months

Market uncertainty exacerbated by the federal government shutdown together with financial uncertainty stemming from tariffs and rising development prices saved builder confidence firmly in unfavorable territory in November.

Builder confidence available in the market for newly constructed single-family houses rose one level to 38 in November, in keeping with the Nationwide Affiliation of House Builders (NAHB)/Wells Fargo Housing Market Index (HMI) launched at this time.

“Whereas decrease mortgage charges are a optimistic growth for affordability situations, many consumers stay hesitant due to the current record-long authorities shutdown and issues over job safety and inflation,” mentioned NAHB Chairman Buddy Hughes, a house builder and developer from Lexington, N.C. “Extra builders are utilizing incentives to get offers closed, together with decreasing costs, however many potential consumers nonetheless stay on the fence.”

“We proceed to see demand-side weak spot as a softening labor market and stretched client funds are contributing to a troublesome gross sales surroundings,” mentioned NAHB Chief Economist Robert Dietz. “After a decline for single-family housing begins in 2025, NAHB is forecasting a slight acquire in 2026 as builders proceed to report future gross sales situations in marginally optimistic territory.”

In an additional signal of ongoing challenges for the housing market, the most recent HMI survey additionally revealed that 41% of builders reported reducing costs in November, a file excessive within the post-Covid interval and the primary time this measure has handed 40%. In the meantime, the typical worth discount was 6% in November, the identical charge because the earlier month. The usage of gross sales incentives was 65% in November, tying the share in September and October.
…
The HMI index gauging present gross sales situations elevated two factors to 41, the index measuring future gross sales fell three factors to 51 and the gauge charting visitors of potential consumers posted a one-point acquire to 26.

Trying on the three-month transferring averages for regional HMI scores, the Northeast rose two factors to 48, the Midwest fell one level to 41, the South elevated three factors to 34 and the West gained two factors to 30.

emphasis added