US home builder confidence falls to 32 in September as mortgage rates and costs rise
The NAHB/Wells Fargo Housing Market Index dropped three points, and 38% of builders cut prices, up from 35% in August, the National Association of Home Builders said on 16 September.
The National Association of Home Builders published its Housing Market Index for September 2026 on 16 September.
The figures
- Housing Market Index: 32, down three points from August
- Current sales conditions: 35, down four points
- Sales expectations for the next six months: 37, down six points
- Traffic of prospective buyers: 23, unchanged
The index is based on a monthly survey of builders of new single-family homes. Readings above 50 mean more builders see conditions as good than poor, so 32 shows a clearly weak market.
Prices and incentives
- Builders cutting prices: 38%, up from 35% in August
- Average price cut: 6%, the same as in each of the previous five months
- Builders using sales incentives: 66%, up from 63%, the highest share since December (67%)
- Lot availability: 42% of builders rated it poor and 38% fair
By region
Three-month moving averages:
- Midwest: 44, down one point
- Northeast: 39, down five points
- South: 31, down one point
- West: 28, up one point
Why builders are gloomier
The association pointed to higher mortgage rates, worsening labour shortages and rising material costs, along with higher gasoline and diesel prices.
The Federal Reserve raised its policy rate on 16 September (report). Mortgage rates follow longer-term bond yields rather than the Fed's rate directly, but both respond to the inflation outlook, which is why housing data are read alongside the Fed. The housing market also feeds into consumer spending (retail sales report). Live prices: the US 500.
Sources
Common questions
What is the NAHB Housing Market Index?
A monthly survey of US builders about the market for new single-family homes, published by the National Association of Home Builders with Wells Fargo. Readings above 50 mean more builders see conditions as good than poor.
How many home builders cut prices in September 2026?
38% of builders cut prices in September 2026, up from 35% in August, with an average reduction of 6%. 66% used sales incentives.
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