U.S. homebuilder sentiment declined in April 2026 to its lowest level since September 2025, as elevated interest rates, rising construction costs and broader economic uncertainty weighed on demand at the start of the spring selling season.
Confidence among builders of newly constructed single-family homes fell four points to 34, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released this week. A reading below 50 indicates more builders view conditions as poor than good.
“Builder sentiment has retreated this spring as prospective buyers continue to face elevated borrowing costs and increasing economic uncertainty,” said NAHB Chairman Bill Owens. “The year began with expectations for stronger housing momentum, but risks tied to geopolitical tensions, higher energy prices and weakening consumer confidence have slowed activity.”
Rising fuel costs tied to the Iran war and higher oil prices are also feeding through to construction expenses. About 62% of builders reported suppliers raised material prices due to higher gasoline and diesel costs, according to NAHB Chief Economist Robert Dietz. Energy accounts for roughly 4% of residential construction inputs and services, he said, adding that 70% of builders cited difficulty pricing homes amid cost uncertainty.
Price cuts remained widespread but edged lower. Some 36% of builders reduced home prices in April, down from 37% in March, with the average reduction narrowing to 5% from 6%. The use of sales incentives slipped to 60% from 64%, though it marked the 13th straight month that incentives were used by at least 60% of builders.
All three major components of the index declined. The gauge of current sales conditions fell four points to 37, while the measure of expected sales over the next six months dropped seven points to 42. A third index tracking prospective buyer traffic decreased three points to 22, underscoring continued softness in demand.
On a regional basis, three-month moving averages showed modest declines across most of the country. Sentiment in the Northeast fell two points to 42 and the Midwest slipped two points to 41. The South was unchanged at 35, while the West posted the weakest reading, falling three points to 29.
The HMI is based on a monthly survey of builders that has been conducted for more than four decades, measuring perceptions of current and future sales as well as buyer traffic.
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