Builder confidence ticked one point higher to 35 in August, an improvement from July but still below the positive/negative point of 50, according to the latest survey from the National Association of Home Builders.
Any reading over 50 indicates more builders view conditions as good than poor.
Looking at the three-month averages for regional HMI scores, the Northeast fell one point to 44, the Midwest and the West were flat at 45 and 27, respectively, and the South slipped two points to 31.
“While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty,” NAHB Chairman Bill Owens said. “Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines. However, the Midwest remains a bright spot for the home building industry, with new home sales up in that region more than 2% so far in 2026.”
The other three components of the Housing Market Index improved in May. The gauge measuring current sales conditions rose two points to 39 from July to August, while the indexes measuring future sales expectations and traffic from prospective buyers were both steady at 43 and 23, respectively.
“Our latest builder survey continues to show signs of weakness in the home building market,” NAHB Chief Economist Robert Dietz said. “August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand, as well as the 16th consecutive month with the HMI below 40. Custom home builders continue to report stronger market conditions than spec builders, reflecting better conditions at the higher end of the market. Smaller, less dense markets are also outperforming larger metropolitan areas, and smaller builders report relatively stronger conditions than larger builders.”
