Housing Market takes a Blow as builder confidence falls

Builder confidence continued to slide in the month of June while the percentage of builders cutting prices and adding incentives to lure buyers increased. Builder confidence for newly built single-family homes was 32 in June, down two points from May. These figures come from the NAHB/Wells Fargo Housing Market Index (HMI), a monthly index designed to gauge and track the pulse of the single-family housing market. In addition, builders reported a decline in buyer traffic and lowered their expectations for sales over the next six months.

Below are the readings for the three HMI indices in June:

• Current sales conditions fell two points to 35.
• Sales expectations in the next six months dropped two points lower to 40.
• Traffic of prospective buyers posted a two-point decline to 21.

The latest HMI survey also revealed that 37% of builders reported cutting prices in June, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022. This compares with 34% of builders who reported cutting prices in May and 29% in April.

Meanwhile, the average price reduction was 5% in June, the same as it’s been every month since last November. The use of sales incentives was 62% in June, up one percentage point from May.

The NAHB/Wells Fargo HMI is based on a monthly survey of single-family builders who are asked to rate three specific conditions of the housing market:

• Present sales of new single-family homes
• Expected sales of single-family homes for the next six months
• Traffic of prospective buyers of new single-family homes

Each month, the HMI depicts overall builder sentiment toward housing market conditions on a scale ranging between 0 and 100. A higher reading (>50) is an indication that the majority of builders feel confident about the current and near-term outlook for housing. Lower readings signify less optimism among builders.

The HMI is a weighted average of the three components included in the monthly builder survey: present sales of new single-family homes, expected sales of single-family homes for the next six months, traffic of prospective buyers of new single-family homes.

The panel of builders to whom the survey is sent is stratified by region of the country and size of the builder. The panel is refreshed on an annual basis to ensure optimal response rates and balanced participation from builders across the country. Report by NAHB Housing & Economics July, 2025