Homebuilder confidence in the U.S. is down, with the National Association of Home Builders (NAHB)/Wells Fargo index dropping to 32 in June, its lowest level since December 2022. Economists were expecting a reading of 36.
This comes as high mortgage rates, persistent economic uncertainty, and tariff concerns deter prospective buyers.
The negative readings were widespread. The measurement of present sales fell to its lowest level since 2012, expected sales over the next six months dropped to their lowest point in over a year, and NAHB is now forecasting a decline in single-family housing starts for the year. Among builders, 37% reported cutting prices in June, the highest since NAHB began monthly tracking in 2022, and more builders are now offering discounts and incentives to attract buyers.
All of this signals a challenging environment for the housing market, with affordability and market uncertainty weighing heavily on both builders and buyers. Historically, the summer months represent the peak of the homebuying season, with activity typically cooling off as we approach year-end. Given this seasonal trend, a decline in confidence during what should be a strong period for the housing market raises some questions. It may signal underlying challenges that could persist into the slower months ahead.
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