Builder confidence in the market for newly built single-family homes warmed slightly in July with the passage of the One Big Beautiful Bill Act, but full-blown optimism was weighed down by elevated interest rates and uncertainty over the economy.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) has a 33 reading for July, up one point from June. This marked the 15th consecutive month when builder sentiment was stuck in negative territory; any number over 50 indicates that more builders view conditions as good than poor.
The latest HMI survey found 38% of builders cutting prices in July, the highest percentage since NAHB began tracking this figure in 2022. This compares with 37% of builders who reported cutting prices in June, 34% in May and 29% in April. Meanwhile, the average price reduction was 5% in July, the same level since last November, while the use of sales incentives was 62% in July, unchanged from June.
The HMI index gauging current sales conditions inched up by one point in July to a level of 36 while the component measuring sales expectations in the next six months increased three points to 43. The gauge charting traffic of prospective buyers dipped by one point to 20, the lowest reading since end of 2022.
Looking at the three-month moving averages for regional HMI scores, the Northeast increased two points to 45, the Midwest held steady at 41, the South dropped three points to 30 and the West declined three points to 25.
“The passage of the One Big Beautiful Bill Act provided a number of important wins for households, home builders and small businesses,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, North Carolina. “While this new law should provide economic momentum after a disappointing spring, the housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates.”
