Washington, D.C.—Economic uncertainty, rising building material costs and elevated interest rates led to a sharp decline in builder sentiment in April as the housing market enters the spring buying season.
Builder confidence in the market for newly built single-family homes fell four points to 34 in April, according to the National Association of Home Builders and Wells Fargo Housing Market Index released today. This marks the lowest level since September 2025.
“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” said Bill Owens, a home builder and remodeler from Worthington, Ohio. “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs and declines for consumer confidence have slowed the market.”
Survey results
The latest HMI survey also showed that 36% of builders cut prices in April, down slightly from 37% in March. The average price reduction was 5%, down from 6% in March. The use of sales incentives was 60% in April, down from 64% in March. This marks the 13th consecutive month this share has reached 60% or higher.
Derived from a monthly survey NAHB has conducted for more than 40 years, the NAHB/Wells Fargo HMI measures builder perceptions of current single-family home sales and expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are used to calculate a seasonally adjusted index. Any reading above 50 indicates more builders view conditions as good than poor.
All three major HMI indices posted losses in April. The index for current sales conditions fell four points to 37, while the index measuring future sales dropped seven points to 42. The index tracking traffic of prospective buyers declined three points to 22.
“With oil prices higher in the U.S., 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” said Robert Dietz. “Energy costs make up approximately 4% of residential construction material input and service costs. With near-term economic risks elevated, 70% of builders reported challenges pricing homes given uncertainty about material costs.”
Looking at three-month moving averages for regional HMI scores, the Northeast fell two points to 42. The Midwest dropped two points to 41. The South held steady at 35. The West fell three points to 29.