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Builder sentiment edges up in August, but affordability incentives stay high
The NAHB/Wells Fargo HMI rose to 35 in August, while incentives remained widespread at 63% and current sales conditions improved to 39.
Builder confidence ticked higher in August but remained weak as affordability pressures persisted and builders continued to rely on incentives to spur demand, HousingWire reported, citing the NAHB/Wells Fargo Housing Market Index.
The report said the headline HMI increased to 35, and incentives stayed widespread at 63%. It also noted that private builders face tougher constraints than public builders because they typically have less scale and capital to fund rate buydowns and discounts.
HousingWire added that elevated mortgage rates and ongoing affordability challenges are forcing builders to effectively pay for sales, tightening net margins. NAHB Chairman Bill Owens said builder sentiment edged up, but builders still contend with high construction costs and broader economic uncertainty, with rising gas and diesel prices pushing up material costs and spec home building remaining weak as some buyers stay on the sidelines.
The survey also showed current sales conditions rose two points to 39 in August, while sales expectations over the next six months held at 43 and prospective buyer traffic remained at 23. Looking at regional three-month moving averages, the Northeast slipped one point to 44, the Midwest was unchanged at 45, the South fell two points to 31, and the West held steady as the Midwest was described as a relative bright spot, with new home sales up more than 2% so far in 2026.