Washington, D.C.—Builder confidence in the market for newly built single-family homes remained low in August as affordability challenges continued to weigh on the housing market according to the National Association of Home Builders (NAHB).
The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 35 in August. Builders continue to face economic and geopolitical uncertainty, elevated mortgage rates and rising construction costs.
“While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” said Bill Owens, chairman of the NAHB and a home builder and remodeler from Worthington, Ohio. “Rising gas and diesel prices are pushing up material costs and spec home building remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the home building industry, with new home sales up in that region more than 2% so far in 2026.”
Robert Dietz, NAHB chief economist, added, “Our latest builder survey continues to show signs of weakness in the home building market.”
Builders continue to cut prices
The latest survey showed 35% of builders cut prices in August, down from 37% in July and unchanged from June.
Builders reported an average price reduction of 6% in August, unchanged from July. Meanwhile, 63% of builders used sales incentives, also unchanged from the previous month.
“August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40,” Dietz said. “Custom home builders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas and smaller builders report relatively stronger conditions than larger builders.”
NAHB has conducted the monthly HMI survey for more than 40 years. The index measures builder perceptions of current single-family home sales and sales expectations for the next six months.
The survey asks builders to rate conditions as “good,” “fair” or “poor.” It also asks them to rate prospective buyer traffic as “high to very high,” “average” or “low to very low.”
NAHB uses those responses to calculate a seasonally adjusted index. A reading above 50 indicates that more builders view market conditions as good than poor.
The index measuring current sales conditions increased two points to 39 in August. The index measuring sales expectations for the next six months held steady at 43. Prospective buyer traffic also remained unchanged at 23.
Regional results showed mixed conditions based on three-month moving averages. The Northeast fell one point to 44, while the Midwest held steady at 45.
The South dropped two points to 31. The West remained unchanged at 27.