by However, a prolonged reading below 50 shows that more builders view marketplace conditions as poor versus good
WASHINGTON — Homebuilder confidence rose slightly in August, reflecting builder concerns about elevated mortgage rates, higher construction costs and overall economic and geopolitical uncertainty.
That was the theme of the recently released National Association of Home Builders/Wells Fargo Housing Market Index. The reading rose one point to 35 this month, reflecting a slightly lower level of negative sentiment as a reading over 50 means that more builders view conditions as good versus poor.
In addition, the survey noted that 35% of builders reduced prices in August, down from 37% from July and unchanged from June. This was the 16th straight month that at least 30% of builders reported cutting prices to support demand. It also was the 16th consecutive month the HMI was below 40.
The survey noted that the average price reduction was 6% in August, unchanged from July. In addition, the use of sale incentives was 63% in August, unchanged from July.
“While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” said NAHB Chairman Bill Owens, a homebuilder and remodeler from Worthington, Ohio. “Rising gas and diesel prices are pushing up material costs, and spec homebuilding remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the homebuilding industry, with new home sales up in that region more than 2% so far in 2026.”
NAHB Chief Economist Robert Dietz said the survey continues to show weakness in the market. However, he also noted there are some bright spots in homebuilding.
“Custom homebuilders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market,” he said. “Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders,” he said.
Other highlights of the report were as follows:
+ The index measuring current sales conditions increased two points to 39.
+ The indexes for future sales expectations and prospective buyer traffic held steady at 43 and 23, respectively.
+ Based on three-month moving averages for regional HMI scores, the Northeast fell one point to 44.
+ The Midwest held steady at 45.
+ The South fell two points to 31.
+ The West was unchanged at 27.
