Builder confidence in the market for newly built single-family homes evaporated in the latest Housing Market Index (HMI) published by the National Association of Home Builders (NAHB), dropping four points in April to 34, its lowest level since September 2025. Any number over 50 indicates that more builders view conditions as good than poor.
The NAHB blamed economic uncertainty for driving down optimism among its membership.
“With oil prices higher in the US, 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” said NAHB Chief Economist 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.”
The latest HMI survey revealed that 36% of builders cut prices in April, down slightly from 37% in March. The average price reduction was 5%, down from the 6% figure in March. The use of sales incentives was 60% in April, down from 64% in March, and marking the 13th consecutive month this share has reached 60% or higher.
“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” said NAHB Chairman 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.”
All three of the major HMI indices posted losses in April. The HMI index gauging current sales conditions fell four points to 37 from March to April, the index measuring future sales dropped seven points to 42 and the index charting traffic of prospective buyers posted a three-point decline to 22.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 42, the Midwest dropped two points to 41, the South was unchanged at 35 and the West fell three points to 29.
0 Comments