WASHINGTON — Confidence among builders of newly constructed single-family homes fell in October, with weaker buyer traffic and sales expectations pulling a closely watched industry survey to its lowest reading since June 2012.
The National Association of Home Builders/Wells Fargo Housing Market Index declined three points to 29, the association reported Oct. 19. All three components of the index fell.
The measure of current sales conditions slipped two points to 33. Expectations for sales over the next six months dropped five points to 32, while prospective buyer traffic fell five points to 18.
The survey also found that 43% of builders cut prices in October, the largest share reported during the 2020-26 period. The average reduction was 6%, unchanged for a seventh month. Sixty-five percent of builders reported offering sales incentives.
The index measures builders’ assessments, rather than counting completed home sales or construction starts. It combines responses about present sales, expected sales and buyer traffic into a seasonally adjusted reading. A score above 50 means more builders rate conditions positively than negatively; October’s reading was well below that threshold.
NAHB attributed the decline to mortgage rates, construction costs and other pressures on builders and buyers. That explanation represents the industry group’s assessment, not an independent measure of each factor’s effect.
The results describe the national market. They do not establish the direction of prices, sales or construction activity in St. Louis, and the expectations component is not a guarantee of future sales.
Sources: NAHB October 19 builder sentiment release; NAHB/Wells Fargo HMI findings and methodology.
