A 44-day government shutdown spanning October and November did little to improve already muted market confidence for home builders. The shutdown, economic uncertainty, and rising construction costs contributed to builder confidence remaining firmly in negative territory, in November according to the NAHB/Wells Fargo Housing Market Index (HMI).
Builder confidence in the market for newly built single-family homes was 38 in November, well below the break-even reading of 50.
“While lower mortgage rates are a positive development for affordability conditions, many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation,” says NAHB chairman Buddy Hughers. “More builders are using incentives to get deals closed, including lower prices, but many potential buyers still remain on the fence.”
The November HMI revealed that 41% of builders cut prices during the month, a record high in the post-COVID market and the first time the measure has passed 40%. The average price reduction was 6%. Nearly two-thirds of builder respondents reported using sales incentives to help entice prospective buyers.
“We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment,” says NAHB chief economist Robert Dietz. “After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”
The HMI index gauging current sales conditions increased two points to 41 and the metric tracking traffic of prospective buyers posted a one-point giant to 26. The index measuring future sales fell three points to 51 in November.
The three-month HMI averages increased two points to 48 in the Northeast, fell one point to 41 in the Midwest, increased three points to 34 in the South, and rose two points to 30 in the West.
