Hardware Retailing The Industry's Source for Insights and Information
Builder sentiment remains low amid economic and geopolitical uncertainty, elevated mortgage rates and rising construction costs. Confidence in the market for newly built single-family homes inched up one point to 35 in August, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
August marked the 16th straight month that at least 30% of builders reported cutting prices in support of demand, as well as the 16th consecutive month with the HMI below 30.
For independent home improvement retailers, persistently low builder confidence is a warning sign for sluggish new-construction demand.
Custom homebuilders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders.
When builders delay or cancel projects, home improvement retailers lose sales across various building material categories. The impact can extend beyond the jobsite, since fewer completed homes also mean fewer homeowners buying appliances, paint, lawn and garden products and other move-in items.
Rising gas and diesel prices are pushing up material costs, and spec homebuilding remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the homebuilding industry, with new home sales up in that region more than 2% so far in 2026.
