U.S. Homebuilder Sentiment Hits 12-Month Low in September

The National Association of Home Builders reported Wednesday that its Housing Market index fell to 32 in September, the lowest level in one year. This decline surpassed economist expectations of 34 and follows an August reading of 35, driven by a sharp drop in current sales conditions and future sales expectations.

Chairman Bill Owens attributed the decline in buyer traffic to rising mortgage rates, which averaged 6.76% last week, and increased 10-year U.S. Treasury yields. Builders are also facing supply constraints due to rising material costs linked to import tariffs, higher fuel prices, and persistent labor shortages. Owens noted that increased immigration enforcement has discouraged some legal workers from reporting to job sites.

To combat weakening demand and a glut of unsold new homes, 38% of builders cut prices in September. Additionally, 66% of builders utilized sales incentives to attract buyers, the highest share since December. This downturn mirrors broader trends in the housing market, with the National Association of Realtors reporting that existing home sales hit a 14-month low in August.