Particle.news
Download on the App Store
5 ARTICLES
·
1h ago

U.S. Homebuilder Sentiment Falls to 35 on High Rates and Rising Costs

Affordability is strained, forcing builders to cut prices and increase incentives.

Newly built single-family homes are shown at a Lennar development still under construction in San Diego, California, U.S., March 11, 2025. REUTERS/Mike Blake/File Photo
Image
Team of women architect and men construction worker at construction site. They are looking at blueprint. They are discussing about their project.

Overview

  • The NAHB/Wells Fargo Housing Market Index dropped two points to 35 in June, a reading reported on Monday that marks the 14th straight month below 40.
  • Builders cited higher mortgage rates and rising construction material costs as the main headwinds reducing buyer demand and slowing current sales.
  • Survey components show current sales fell to 38, six-month sales expectations held at 45, and prospective buyer traffic remained very low at 25.
  • Weak demand has pushed firms to offer more incentives and discounts, with 62% using sales incentives for the 15th straight month above 60% and 35% reporting price cuts averaging about 6%.
  • Even if a reported agreement to end the regional conflict eases oil-driven rate pressure in the near term, structural affordability problems and five straight quarters of contracting residential investment mean a sustained recovery is not yet clear.