Builder confidence fell to 29, its lowest since 2012. Do you use builder surveys in your trading?

The NAHB and Wells Fargo housing market index fell three points to 29 in October, its lowest reading since June 2012. Some 43% of builders cut prices, the highest share in the 2020 to 2026 period, and 65% offered sales incentives (NAHB report).

Builder surveys ask about current sales, expectations and buyer traffic, so they can move before the Census starts figures do. The survey reports both the share of builders cutting prices and the average cut, and the two can move separately. Buyer traffic is the survey's most direct measure of demand, and it fell to its lowest level since April 2012, excluding the start of the pandemic.

We would like to hear how you use builder sentiment:

• Do you treat the NAHB survey as a leading indicator, or as background to the Census data?
• When buyer traffic falls, do you adjust your view of mortgage rates or of the dollar?
• Which part of the survey do you watch most, the share of price cuts or buyer traffic?
• Have you traded a housing survey and then found the official data disagreed?

US housing starts for September gives the official side of the same story.

Please share your own approach and reasoning, not calls for others to copy. Posts that promise a direction or sell signals will be removed.