The NAHB/Wells Fargo Housing Market Index slid to 29 in October, the lowest since June 2012, falling three points from September's 32. The dip reflects a sharp drop in builder confidence as mortgage rates climb and construction costs surge.
Mortgage rates hit 7.40% on the 30‑year fixed, the highest in nearly three years, while tariffs on imported lumber and steel have pushed material costs higher. Bill Owens, NAHB chairman, said builders face "persistent labor shortages" amid an immigration crackdown that has delayed projects across the country.
Price cuts and incentives have surged: 43% of builders slashed prices in October, the highest share since 2020, with an average cut of 6% sustained for seven straight months. At the same time, 65% of builders offered sales incentives, marking the 19th consecutive month that the strategy has been used.
The slump feeds into broader affordability concerns ahead of the November 3 mid‑term elections, as President Donald Trump dismissed a bipartisan housing bill and pushed for separate voting‑rights legislation. With builder confidence at a 14‑year low, lawmakers face pressure to address the rising cost of homes and the mortgage‑rate squeeze.