Overview
- The NAHB/Wells Fargo Housing Market Index rose one point to 35 in August, the report published Aug. 17 showed, marking a small improvement that still sits well below the 50 level that signals positive conditions.
- The index has stayed under 40 for 16 straight months, the longest run since 2012, which signals sustained weakness in builder sentiment rather than a short setback.
- Builders point to costly financing and inputs as the main brakes on demand, with the 30-year mortgage rate near 6.77% and gasoline and diesel price gains pushing up construction and transport costs.
- To stimulate sales, roughly one-third of builders reported cutting prices with an average reduction near 6% and about 63% offered sales incentives, strategies companies say are needed to win hesitant buyers.
- Conditions vary by market and builder type: custom and smaller-market builders are faring better than large metro and speculative-volume firms, a split that could reshape where new home starts and sales recover first.