Builder confidence falls to 29 in October, lowest since 2012, NAHB says
The NAHB/Wells Fargo index fell three points as 43% of builders cut prices and 65% used incentives. It is a builder survey, not a sales count or a mortgage rate.
By Christopher Salem · 3 min read
Confidence among builders of new single-family homes fell three points to 29 in October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index released Monday, Oct. 19, 2026. NAHB said it was the lowest reading since June 2012. September was revised to 32. NAHB press release.
All three parts of the index fell
The index combines three survey questions. The gauge of current single-family sales conditions fell two points to 33. Expectations for sales over the next six months dropped five points to 32, and the measure of prospective buyer traffic fell five points to 18. October figures are preliminary in NAHB's Table 1.
NAHB/Wells Fargo Housing Market Index, March to October 2026
| Component | Sep. 2026 (revised) | Oct. 2026 (prelim.) | Change |
|---|---|---|---|
| Current single-family sales | 35 | 33 | −2 |
| Sales expected in next six months | 37 | 32 | −5 |
| Traffic of prospective buyers | 23 | 18 | −5 |
The index is seasonally adjusted and runs from 0 to 100. A reading above 50 means more builders view conditions as good than poor, so 29 means poor ratings clearly outnumber good ones. NAHB chief economist Robert Dietz said buyer traffic was at its lowest level since April 2012, excluding the pandemic's onset in April 2020.
Price cuts and incentives
NAHB reported that 43% of builders cut prices in October, the highest share during the 2020 to 2026 period. The average price cut held at 6% for a seventh straight month. Some 65% of builders used sales incentives, the 19th consecutive month that at least 60% did so. NAHB HMI page.
Regionally, on three-month moving averages, the Northeast fell one point to 38, the Midwest fell three points to 40, the South fell one point to 30 and the West fell two points to 26.
What NAHB says is behind it
NAHB chairman Bill Owens said mortgage rates "have climbed well above 7% in recent weeks" and that higher gas prices and inflation have weakened buyer traffic. He also cited higher costs for construction loans, building materials and diesel. Dietz said higher mortgage rates, elevated construction costs and weaker consumer confidence "are keeping more buyers on the sidelines." Those are the association's explanations; the survey itself measures builder ratings, not the causes.
Home builder confidence fell to the lowest level in 14 years in October as the NAHB/@WellsFargo Housing Market Index (HMI) fell three points to a reading of 29. High mortgage rates and inflation are dragging on home buyer demand. #housing #realestate https://t.co/svzKsUJ5rO
— NAHB 🏠 (@NAHBhome) October 19, 2026
What it means for borrowers and loan officers
The HMI is a sentiment survey. It is not a count of new-home sales, a price index or a mortgage rate, and it does not set what any lender will quote. Actual sales and starts come from separate Census Bureau reports.
The useful detail for shoppers is in the price-cut and incentive shares. With 43% of builders reporting cuts and 65% using incentives, buyers looking at new construction may find builders willing to negotiate on price, closing costs or financing. Terms vary by builder and market, and a builder-paid rate buydown should be compared with the full cost of the loan on a Loan Estimate. Loan officers working with builder clients may want to confirm how any incentive is credited and whether it fits program limits on seller or interested-party contributions.
Watch: the October reading in 15 seconds
Film transcript: Builder confidence in 2026, NAHB/Wells Fargo Housing Market Index: March 38, April 34, May 37, June 36, July 34, August 35, September 32, October 29. October 2026 reading: 29, down 3 points from 32 in September, lowest since June 2012 per NAHB; below 50 means more builders rate conditions poor than good. All three components fell: current sales 33, down 2; next six months 32, down 5; buyer traffic 18, down 5. 43% of builders cut prices, the highest share of 2020 to 2026; the average cut was 6% for a seventh month; 65% used incentives. Survey results, not a forecast of your price or rate. Music: original instrumental score made for this film.
Cover: NAHB headquarters at the National Housing Center, 1201 15th Street NW, Washington, D.C. Archival photograph taken July 24, 2025 by Jpljr77 via Wikimedia Commons, licensed under CC BY-SA 4.0. Not altered.