Builder confidence in the market for newly built single-family homes was 32 in September, unchanged from the August reading, according to the National Association of Home Builders and Wells Fargo Housing Market Index.
While builder sentiment has hovered at a low reading between 32 and 34 since May, builders expressed optimism that a more favorable interest rate climate could bring hesitant buyers back to the market in the final quarter of 2025.
Index levels below 50 indicate more builders view market conditions as “poor” than “good.”
“NAHB expects the Fed to cut the federal funds rate at their meeting this week, which will help lower interest rates for builder and developer loans,” NAHB Chief Economist Robert Dietz said in a statement. “Moreover, the 30-year fixed rate mortgage average is down 23 basis points over the past four weeks to 6.35%, per Freddie Mac. This is the lowest level since mid-October of last year and a positive sign for future housing demand.”
The HMI survey also revealed 39% of builders reported cutting prices in September, up from 37% in August, and the highest percentage in the post-COVID period.
The use of sales incentives was 65% in September, down slightly from 66% in August.
Read the full report here.
