Hardware Retailing The Industry's Source for Insights and Information
Builder sentiment levels in September remained unchanged but lower mortgage rates and expectations that the Federal Reserve will cut the federal funds rate led to higher future expectations in the coming months, according to an analysis by the National Association of Home Builders (NAHB).
The NAHB Housing Market Index (HMI) reported builder confidence was 32 in September, the same as the August reading.
“While builders continue to contend with rising construction costs, a recent drop in mortgage interest rates over the past month should help spur housing demand,” says NAHB chairman Buddy Hughes, a homebuilder and developer from Lexington, North Carolina.
The latest HMI survey also revealed 39% of builders reported cutting prices in September, up from 37% in August and the highest percentage in the post-COVID period. The average price reduction was 5% in September, the same as it has been since November of 2024.
HMI gauges builders’ 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 the 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.
Future expectations in September rose two points to 45, the highest reading since March of last year. For regional HMI scores, the Northeast was unchanged at 44, the Midwest gained one point to 42, the South held steady at 29 and the West increased one point to 26.
