Builder Confidence Up in July, Affordability Challenges Persist

In July, builder confidence in the market for newly built single-family homes was 33, up one point from June, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Builder confidence for future sales expectations increased with the passage of the One Big Beautiful Bill Act, but elevated interest rates and policy uncertainty still persist in the housing sector. 

“The passage of the One Big Beautiful Bill Act provided a number of important wins for households, home builders and small businesses,” says Buddy Hughes, NAHB chairman and home builder and developer from Lexington, North Carolina. “While this new law should provide economic momentum after a disappointing spring, the housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates.”

The latest HMI survey also reported 38% of builders cut prices in July, up from 37% in June and 34% in May. The average price reduction was 5% in July, the same as every month since November 2024.

​​The NAHB/Wells Fargo HMI 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.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

“Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges,” said NAHB Chief Economist Robert Dietz. “Single-family permits are down 6% on a year-to-date basis and builder traffic in the HMI is at a more than two-year low.”