Builder confidence shows weakness in housing market

Builder confidence in the new single-family home market increased this month but remains weak, according to August’s National Association of Home Builders/Wells Fargo Housing Market Index. .The index increased one point to 35. Based on a monthly survey of homebuilders, the Housing Market Index is on a scale of 0 to 100. Any reading above 50 indicates more optimism than pessimism. According to NAHB, the relatively low number shows affordability challenges, mortgage rates near 6.7 percent, along with rising material and construction costs. The index measuring sales expectations for the next six months remained at 43, while the index tracking prospective buyers’ traffic remained at 23. Thirty-five percent of builders cut home prices in August, down from 37 percent in July but unchanged from June. The average price reduction this month was 6 percent, unchanged from July. Homebuilding activity fell in July, according to the U.S. Census Bureau and the Department of Housing and Urban Development. Privately-owned housing starts fell 12.4 percent to 1.23 million from 1.41 million in June amid higher-than-normal financing and borrowing costs, elevated construction expenses and labor shortages. Last month’s mark was 13.5 percent under the July 2025 reading of 1.43 million. Single-family housing starts dropped nearly 10 percent to 808,000 from 897,000 in June. Single-family housing completions dropped 5.8 percent to 878,000 from 932,000 in June. Privately owned housing permits increased 5 percent from June to 1.44 million, 3.1 percent higher than its year-ago mark of 1.40 million. Single-family authorizations also increased, rising 2.5 percent to 894,000 from 872,000 in June.