Builders slashed prices at a rapid pace, but buyers stayed wary
Homebuilders in the United States struggled to lift buyer confidence in November, even as a record share of firms slashed prices to move inventory.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) inched up just one point to 38. That's well below the neutral 50 mark and marking the 19th straight month of negative sentiment.
The latest HMI survey revealed that 41% of builders cut prices in November, the highest share since the onset of the pandemic. This is the first time this measure has passed 40% in the post-Covid period.
The average price reduction held steady at 6%, while 65% of builders used sales incentives, matching the previous two months.
Despite these efforts, buyers remained hesitant.
“We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment,” NAHB chief economist Robert Dietz said.
“After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”
Labor market stagnation and economic uncertainty have weighed heavily on buyer sentiment. Data from ADP Research showed US companies shed more than 11,000 jobs per week toward the end of last month.
“Many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation,” NAHB chairman Buddy Hughes said.
The HMI’s component tracking current sales conditions rose two points to 41, but expectations for the next six months fell three points to 51.
Prospective buyer traffic edged up one point to 26, still deep in negative territory.
Over the past three months, builder sentiment rose in the Northeast (48) and West (30), dipped slightly in the Midwest (41), and climbed in the South (34).
Mortgage rates, while off their peak, remain elevated, and the affordability gap continues to push many would-be buyers to the sidelines.
The National Association of Realtors recently estimated the median age of first-time buyers at 40, up from the late 20s in the 1980s, underscoring the impact of affordability constraints.
Looking ahead, builders are pinning hopes on a stronger spring selling season, with some expecting that continued discounting and a gradual improvement in inventory will help stabilize demand.
“More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence,” Hughes said.
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