US Homebuilder Mood Hits 8-Month High, Still Subdued

The NAHB/Wells Fargo Housing Market Index eased to 36 in February of 2026 from 37 in the previous month, contrasting slightly with market expectations that it would improve to 38. It was the softest reading in five months, reflecting continued challenges in the US housing market. Builder sentiment deteriorated across most components of the index, with sales expectations in the next six months dropping by three points to 46, while the traffic of positive buyers dropped two points to 22. In turn, current sales conditions remained unchanged 41. Th survey reported that 36% of builders cut prices in the period, 4 percentage points below the ratio in January.

The NAHB/Wells Fargo Housing Market Index fell to 37.0 in January 2026, down from 39.0 in December and below market expectations of 40.0. This marked the weakest reading in three months, signaling continued challenges in the US housing market. Builder sentiment deteriorated across all components of the index. Current sales conditions edged down by one point to 41, while sales expectations for the next six months declined three points to 49. Traffic of prospective buyers also weakened, falling three points to 23. The survey further showed that 40% of builders reported cutting prices in January, unchanged from December and marking the third consecutive month in which the share remained at 40% or higher, the highest level since May 2020. The average price reduction increased to 6%, up from 5% in December. Meanwhile, the use of sales incentives rose to 65%, extending a streak of 10 consecutive months above the 60% threshold.

The NAHB/Wells Fargo Housing Market Index in the US inched up to 39 in December 2025, the highest in eight months, from 38 in November, while analysts expected it to remain steady at 38. Still, the index stayed below the 50 threshold for the 20th consecutive month, as builders contend with higher construction costs, economic and tariff risks, and muted buyer demand due to affordability concerns. Current sales conditions edged up one point to 42, the index measuring future sales rose one point to 52 and the gauge charting traffic of prospective buyers held steady at 26. In a further sign of ongoing challenges for the housing market, the latest survey also revealed that 40% of builders reported cutting prices in December, marking the second consecutive month the share has been at 40% or higher since May 2020. The use of sales incentives was 67% in December, the highest percentage in the post-Covid period.