As the housing industry continues to be strained by rising material costs, high mortgage rates, and persistent affordability issues, builder confidence is still muted. The National Association of Home Builders (NAHB) and the Wells Fargo Housing Market Index (HMI), which was issued today, shows that builder confidence in the market for newly constructed single-family homes dropped two points to 35 in June. Sentiment has been below 40 for 14 consecutive months, a run not seen since the foreclosure crisis in 2011–2012.
Key Findings (June 2026):
- Builder confidence in the market for newly built single-family homes fell two points to 35 in June.
- Current sales conditions fell two points to 38.
- Sales expectations in the next six months held steady at 45.
- Traffic of prospective buyers remained unchanged at 25.
“With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for home building,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “Congress can help by passing the major housing package now before the Senate, along with the CONSTRUCTS Act to address the construction labor shortage and the Energy Choice Act to prevent state and local bans on natural gas in new homes.”
According to the most recent HMI study, 35% of builders lowered prices in June compared to 32% in May. June saw an average price decrease of 6%, which was the same as the previous month. In June, 62% of sales incentives were used, a little increase from 61% in May and the 15th consecutive month that this percentage has been at least 60%.
“Costly and inefficient regulatory policy is clearly impeding the ability of builders to increase the housing supply,” said Robert Dietz, Chief Economist of NAHB. “According to a new NAHB study, government regulation, taxes, fees and other costs add more than 26% to the price of an average single-family home. Easing permitting bottlenecks, density limits and inefficient zoning rules would help reduce costs and support the housing growth the nation needs.”
The NAHB/Wells Fargo HMI measures builder opinions of current single-family home sales and sales projections for the next six months as “good,” “fair,” or “poor.” It is based on a monthly poll that NAHB has been conducting for more than 40 years. June saw an average price decrease of 6%, which was the same as the previous month. In June, 62% of sales incentives were used, a little increase from 61% in May and the 15th consecutive month that this percentage has been at least 60%.
In June, the HMI indicator reflecting current sales conditions dropped two points to 38, the index measuring future sales remained stable at 45, and the index tracking prospective buyer traffic stayed at 25. The Northeast increased by two points to 44, the Midwest remained stable at 43, the South decreased by two points to 33, and the West decreased by one point to 27 when examining the three-month moving averages for regional HMI scores.
Note: Each month, the HMI depicts overall builder sentiment toward housing market conditions on a scale ranging between 0 and 100. A higher reading (>50) is an indication that the majority of builders feel confident about the current and near-term outlook for housing. Lower readings signify less optimism among builders.
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