US Builder Confidence Continues to Reflect Economic Uncertainty and Elevated Material Costs

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) revealed that builder sentiment in the market for newly built single-family homes rose to 40 in April, up one point from March.

Despite this modest increase—likely driven by a recent dip in mortgage rates—builder sentiment remained in negative territory in April. NAHB attributed this to growing economic uncertainty tied to tariff concerns and elevated building material costs.

The April HMI survey also showed that 29% of builders reduced home prices, unchanged from March. The average price cut remained steady at 5%. Use of sales incentives increased slightly, with 61% of builders offering them in April, up from 59% the month before.

Two of the HMI’s three major components posted gains in April. The index measuring current sales conditions rose two points to 45, while the gauge of prospective buyer traffic ticked up one point to 25. However, the component tracking sales expectations over the next six months declined four points to 43.

Regionally, three-month moving averages showed declines across all four regions. The Northeast dropped seven points to 47; the Midwest edged down one point to 41; the South fell three points to 39; and the West declined two points to 35.