Builder sentiment has seen a sharp decline in April, driven by economic uncertainty coupled with rising building material costs and interest rates.
That’s according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The decline comes as the housing market enters into the heart of the spring buying season.
NAHB noted that builder confidence for newly built single-family homes fell four points to 34 in April, the lowest level since September 2025.
“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market.”
Higher fuel costs have impacted builders’ costs.
“With oil prices higher in the U.S., 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” said NAHB Chief Economist Robert Dietz. “Energy costs make up approximately 4% of residential construction material input and service costs. With near-term economic risks elevated, 70% of builders reported challenges pricing homes given uncertainty about material costs.”
Builders Cut Prices
The latest HMI survey also shows that 36% of builders cut prices in April, down a little from 37% in March. The average price reduction was 5%, down from the 6% figure in March, NAHB said. The use of sales incentives was 60% in April, down from 64% in March, and marking the 13th consecutive month this share has reached 60% or higher.
The monthly survey is derived from a survey NAHB has been conducting for more than 40 years/
It gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.”
NAHB said that scores for each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three of the major HMI indices posted losses in April, NAHB noted.
The HMI index gauging current sales conditions fell four points to 37 from March to April, the index measuring future sales dropped seven points to 42 and the index charting traffic of prospective buyers posted a three-point decline to 22, NAHB said.
Looking at the three-month moving averages for regional HMI scores, NAHB noted that the Northeast fell two points to 42, the Midwest dropped two points to 41, the South held constant at 35 and the West fell three points to 29.
