U.S. Homebuilder Confidence Falls to 29, Lowest Since 2012
Key Facts
U.S. builder confidence in the market for newly built single-family homes fell 3 points to 29 in October, according to the National Association of Home Builders, amid financing and sales pressures. The association said in its October statement that confidence reached its "lowest level since June 2012," extending the previous month's decline. The index had fallen 3 points to 32 in September, according to the association's statement for that month. For an annual comparison, the index stood at 37 points in October 2025, compared with the level recorded this October. The weakness extended to builders' assessment of current sales, with that component falling two points to 33 in the October survey.
Builders' expectations for future sales fell 5 points to 32, according to the same survey, a larger decline than in their assessment of current sales. The prospective buyer traffic index also fell 5 points to 18, alongside weaker sales assessments and expectations. On pricing, 43% of builders reported cutting home prices in October, according to the National Association of Home Builders. The share of builders cutting prices had reached 38% in September, putting October's figure above the previous month's level. That followed a reading of 35% in August, according to the September statement, as price cuts became more widespread over those months.
65% of builders used sales incentives in October, according to the association, alongside price cuts by some survey participants. The association said high interest rates affect builders' own borrowing costs, adding pressure to construction financing. High rates also affect their ability to obtain construction loans, according to the National Association of Home Builders. In the existing-home market, the National Association of Realtors reported a 1.5% increase in sales in September, ahead of October's builder confidence reading. But Lawrence Yun, the Realtors association's chief economist, said "additional increases in mortgage rates in recent weeks mean fewer buyers can qualify to purchase a home."
On labor, National Association of Home Builders Chairman Bill Owens said more than a third of builders reported immigration enforcement activity in their market areas over the past month. The association had said in an earlier statement in September that stepped-up enforcement in some markets discouraged legally authorized workers from showing up at job sites. It said in that statement that those workers' absence delayed home construction in the affected markets. The association also linked the disruption to higher costs, alongside the impact it described on construction timelines. Citing government data included in its September statement, it said the construction sector faces a shortage of nearly 300,000 workers.
The skilled labor shortage has a longer history, with a study published in June 2025 and commissioned by the Home Builders Institute examining the issue. Additional analysis from the National Association of Home Builders contributed to the estimate of the shortage's economic impact on the housing sector. The study estimated the total economic impact of the skilled labor shortage at about $10.806 billion annually, according to the association's statement on its findings. It also estimated the unweighted average increase in construction time caused by the labor shortage at about 1.98 months. As a gauge of demand, the Pending Home Sales Index, published by the National Association of Realtors, measures home contract activity.
The National Association of Realtors will release its September Pending Home Sales Index on October 20, according to its 2026 statistical release schedule. The index typically leads existing-home sales by a month or two, according to the association's definition, linking contract activity to subsequent sales. On the same day, the U.S. Census Bureau will release new residential construction data for September 2026, according to the bureau's official schedule. That will be followed by the release of new-home sales for the same month on October 27, 2026, according to the Census Bureau. The National Association of Home Builders has scheduled the next builder confidence reading, for November, for release on November 17, 2026.