by Monthly reading still is below 50, which signals that fewer builders view conditions as good versus poor
WASHINGTON — Confidence among residential builders regarding future home sales rose slightly in July despite ongoing concerns about the impact that current interest rates and trade policy issues will have on the housing sector.
Released July 17, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) was 33, up one point from June. With a reading of 50 or higher showing that more builders view conditions as good versus poor, the July reading has been in negative territory for 15 straight months, the association said, noting that recent legislation could provide some boost to the industry.
“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.”
The association said the latest survey showed that 38% of builders reported cutting prices in July, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022. By comparison, some 37% of builders reported cutting prices in June, while 34% reported cutting prices in May and 29% in April.
The average reported price reduction was 5% in July, unchanged each month since last November, NAHB said, also noting that the use of sales incentives among builders was 62% in July, unchanged from June.
“Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges,” said NAHB chief economist Robert Dietz. “Single-family permits are down 6% on a year-to-date basis, and builder traffic in the HMI is at a more than two-year low.”
The report offers furniture retailers and others in the industry a window into factors impacting new home construction, including the costs of a new home. How consumers respond, particularly to pricing, could ultimately impact their decisions to purchase a home, thus also determining whether or not they spend on new furniture.
Other highlights of the monthly report are as follows:
+ The HMI index gauging current sales conditions rose 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 posted a one-point decline to 20, which the NAHB said is the lowest reading since the end of 2022.
+ Based on a three-month moving averages for regional HMI scores, the survey showed 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.
