Builder confidence in the all-important single-family market has seen a mid-summer decrease, according to new numbers just released by the National Association of Home Builders.
The trendline, said Bill Owens, chairman of the group, is primarily due to potential buyers remaining “on the sidelines as they wait for lower mortgage rates, more certainty on inflation, and a clearer economic outlook.”
Using the Housing Market Index compiled by both the NAHB and the bank Wells Fargo, the confidence level this month has declined to 34 points from June’s 36 points. The figure marks the 15th consecutive month in which the index has come in below 40.
The index reading also revealed that exactly 37% of builders surveyed had cut prices this month, up from 35% last month and 32% in May. In both June and July, the average price reduction stood at 6%.
Meanwhile, sales incentive offerings were offered by 63% of the builders this month, a slight increase from the 62% recorded in June. As with the ongoing lower confidence level, the use of sales incentives by 60% or more of surveyed builders has been a constant since the spring of 2025.
“Affordability remains the home building industry’s primary challenge,” noted Robert Dietz, chief economist with the NAHB, in a press release, “as elevated mortgage rates, costly land, rising material prices and persistent skilled labor shortages continue to affect the market.”
Despite such sobering trends, Dietz added that the Road to Housing Act, passed by Congress earlier this month, is “a positive step that will help expand housing supply and lower overall housing costs, although more policy change is needed at the state and local level.”
Regionally, builders in the Northeast and Midwest reported the high index figures at 45 each; followed by the South at 33; and the West at 26.
July 31, 2026
By Garry Boulard
Photo courtesy of Unsplash
