Confidence among U.S. builders of newly built single-family homes fell in June, while more than one-third of builders cut prices to attract buyers.
By yourNEWS Media Newsroom
U.S. homebuilder confidence declined again in June as elevated mortgage rates, affordability pressures and high construction costs continued to weigh on the market for newly built single-family homes.
The National Association of Home Builders/Wells Fargo Housing Market Index fell two points to 35 in June, the association said in a June 15 statement. The index measures builder confidence in the market for newly built single-family homes.
June marked the 14th consecutive month that the index remained below 40. According to NAHB, that is the longest such streak since the 2011–2012 foreclosure crisis, when the United States saw a sharp increase in home foreclosures.
Builders are facing multiple challenges, including high mortgage rates that are limiting buyer demand, affordability problems for prospective homeowners and elevated material costs that continue to pressure construction budgets.
“With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for home building,” NAHB Chairman Bill Owens said.
Owens urged Congress to move forward with housing-related legislation, including a broader package pending in the Senate and a labor-focused construction bill.
“Congress can help by passing the major housing package now before the Senate, along with the CONSTRUCTS Act to address the construction labor shortage,” Owens said.
The housing package is the 21st Century ROAD to Housing Act, which passed the House of Representatives last month and is now before the Senate. The bill includes provisions intended to encourage local zoning reforms and reduce delays in environmental reviews. Supporters say the measure would help increase the national housing supply.
The CONSTRUCTS Act is aimed at the construction labor shortage. According to NAHB, the bill would expand residential construction training programs at technical education schools, community colleges and other training institutions.
The June survey also showed builders are continuing to use discounts and incentives to generate sales.
NAHB said 35% of builders reduced home prices in June, with the average discount at 6%. More than 60% of builders used sales incentives to attract buyers, marking the 15th straight month that the share stayed at or above 60%.
NAHB Chief Economist Robert Dietz said regulatory costs are also limiting the ability of builders to add housing supply. He cited a recent NAHB study finding that government regulations, fees, taxes and other expenses add more than 26% to the price of an average single-family home.
“Easing permitting bottlenecks, density limits and inefficient zoning rules would help reduce costs and support the housing growth the nation needs,” Dietz said.
The Trump administration has also moved to address regulatory costs tied to home construction.
In April, the Department of Housing and Urban Development and the Department of Agriculture rescinded an energy standards policy that would have added an estimated $20,000 to $31,000 to home construction costs.
Last month, HUD released the State and Local Best Practices for Home Construction Report, which outlines regulatory steps state and local governments can take to reduce construction barriers. The report is intended to help lower building costs and shorten construction timelines.
The broader housing market remains strained.
Real estate marketplace Zillow said in a June 4 report that home sales activity in May was lower than a year earlier as mortgage rates increased. Freddie Mac data showed the weekly average rate for a 30-year fixed-rate mortgage rose from 6.3% for the week ending April 30 to 6.53% for the week ending May 28.
“Typical home values rose slightly (0.6 percent) on a monthly basis to $368,720. Combined with higher mortgage rates, that brought the cost of a typical mortgage to $1,861, rising 1.1 percent from April to May,” Zillow said.
Zillow noted, however, that mortgage rates remain lower than they were a year earlier. As a result, even with annual growth in home values, “typical mortgage costs are still 3.1 percent lower than last May,” the company said.
Lawrence Yun, chief economist at the National Association of Realtors, said during a recent forum that home sales could improve in the second half of 2026 if housing supply and inventory continue to expand, according to a June 16 statement from the association.
Yun also said the typical homeowner is expected to gain roughly $16,000 in housing wealth in 2026.
The June builder confidence report shows that the new-home market remains under pressure despite the nation’s housing shortage. Builders continue to face weak buyer affordability, financing constraints, labor shortages, regulatory burdens and high construction costs, all of which are slowing efforts to increase supply.
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