Builder Confidence Falls to 29, Lowest Since June 2012
Builder confidence fell three points to 29 in October, the National Association of Home Builders said, the lowest reading since June 2012, with 43 percent of builders cutting prices.
Builder confidence October figures showed the gloomiest mood among homebuilders in 14 years, with the National Association of Home Builders and Wells Fargo Housing Market Index falling three points to 29 in October, the association reported on 19 October 2026. That was the lowest reading since June 2012. The index runs from 0 to 100, and any reading below 50 means more builders describe conditions as poor than as good. The survey has been conducted monthly for more than 40 years, asking builders to rate sales conditions as good, fair or poor, and to rate buyer traffic as high, average or low.
All three components of the index declined. Current sales conditions fell two points to 33, sales expectations for the next six months dropped five points to 32, and prospective buyer traffic fell five points to 18. The traffic reading was the lowest since April 2012, setting aside the pandemic collapse of April 2020. The association said rising mortgage rates, energy and material costs, and worsening labour and lot conditions had pushed sentiment to the 14-year low.
How builder confidence October affects new-home buyers
To keep sales moving, 43 percent of builders cut prices in October, the largest share in the 2020 to 2026 stretch covered by the survey, while 65 percent said they used sales incentives such as rate buydowns. The average price cut remained at 6 percent for the seventh month in a row. Those discounts can help buyers who are able to proceed at current mortgage rates, but they also show how hard builders are finding it to sell homes at listed prices. Freddie Mac’s survey had put the average 30-year fixed mortgage rate at 7.40 percent in the week to 15 October, against 6.27 percent a year earlier.
The low confidence reading does not by itself mean that home prices will fall nationally, because the index measures sentiment among builders, not the prices at which homes actually close. It does suggest that new-home construction is likely to stay subdued in the near term, with builders starting fewer homes and offering more incentives to move the homes they have already built. The Census Bureau was due to report September housing starts the following day, and that report was expected to show whether the weak sentiment was already showing up in the number of homes breaking ground.
