Builder confidence declined notably in April as elevated interest rates, rising building material costs, and growing economic uncertainty slowed momentum at the start of the spring selling season.
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder sentiment in the market for newly built single-family homes fell four points to 34 in April, which is the lowest level since September 2025.
“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” says NAHB chairman Bill Owens. “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market.”
Higher energy costs are increasingly affecting construction pricing, particularly through building materials and transportation-related expenses.
“With oil prices higher in the U.S., 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” says NAHB chief economist Robert Dietz. “Energy costs make up approximately 4% of residential construction material input and service costs. With near-term economic risks elevated, 70% of builders reported challenges pricing homes given uncertainty about material costs.”
Despite softer demand, builders continue to use pricing strategies to maintain sales activity, though discounting eased slightly in April. The HMI survey found that 36% of builders cut prices in April, down modestly from 37% in March. The average price reduction was 5%, compared with 6% the previous month. Meanwhile, 60% of builders reported using sales incentives in April, down from 64% in March but still marking the 13th consecutive month that incentive use has held at or above 60%.
The survey measures builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” Builders also rate prospective buyer traffic as “high to very high,” “average,” or “low to very low.” Scores from each component are used to calculate a seasonally adjusted index, where a reading above 50 indicates more builders view conditions as good than poor.
All three major HMI components declined in April. The index measuring current sales conditions fell four points to 37. The index tracking sales expectations over the next six months dropped seven points to 42, while the index gauging prospective buyer traffic posted a three-point decline to 22.
Regionally, three-month moving averages showed mixed results. Builder sentiment in the Northeast slipped two points to 42, while the Midwest also declined two points to 41. The South remained unchanged at 35, and the West fell three points to 29.
