U.S. Home-Builder Sentiment Sinks to 14-Year Low

By Dean Seal

Confidence among U.S. home builders has slumped to its lowest level in 14 years from a mix of high mortgage rates, inflated costs and worsening labor conditions.

The NAHB/Wells Fargo Housing Market Index, a gauge of builder confidence in the market for newly built single family housing, fell three points to 29 in October. That's the lowest reading since June 2012. Economists polled by The Wall Street Journal expected the reading to edge just slightly lower to 31.

Prospective home buyers are being deterred by mortgage rates that have climbed well above 7% in recent weeks, along with higher gas prices and inflation, NAHB Chairman Bill Owens said Monday.

Builders are facing higher costs too, for construction loans, building materials and diesel. They're also deal with persistent labor shortages, driven by immigration enforcement activity during the past month, which have caused construction delays and discouraged legal workers from reporting to work, Owens said.

"Housing remains squeezed by supply-side constraints and significant affordability challenges," said Robert Dietz, the NAHB's chief economist. Buyer traffic has fallen to its lowest level since April 2012, excluding the onset of the pandemic in April 2020, Dietz said.

The survey found that 43% of builders cut prices in October, which is the highest share since 2020. The average price cut remained at 6% for the seventh month in a row. A little under two-thirds of builders reported using sales incentives this month. That figure has stayed above 60% for 19 consecutive months.

The index gauging future sales expectations and the index charting prospective buyer traffic both dropped five points, to 32 and 18, respectively.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

October 19, 2026 10:14 ET (14:14 GMT)