US Builder Confidence for Newly Built Single-Family Homes Falls to 14-Year Low in October

On Monday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment for newly built single-family homes fell 3 points to 29 in October, down from 32 in September. This was the lowest reading since June 2012.

The HMI survey showed that 43% of builders reported cutting prices in October, the highest share recorded during the 2020–26 period. The average price reduction remained at 6% for the seventh consecutive month. The use of sales incentives was 65% in October, marking the 19th consecutive month in which at least 60% of builders offered incentives.

The survey also found that more than one-third of builders nationwide reported immigration enforcement activity in their market areas during the previous month, resulting in construction delays and discouraging legal workers from reporting to work, NAHB said.

The HMI component measuring current sales conditions fell 2 points to 33, while the gauge of sales expectations over the next six months dropped 5 points to 32. The index tracking prospective buyer traffic declined 5 points to 18, its lowest reading since April 2012, excluding April 2020.

Regional three-month moving averages showed declines across all four regions. The Northeast fell 1 point to 38; the South declined 1 point to 30; the West dropped 2 points to 26; and the Midwest fell 3 points to 40. The Midwest remained a relatively stronger market for single-family home building, with permits up 2.9%.