Despite ongoing challenges in the housing market, builder sentiment appears to have improved slightly in January. According to the National Association of Home Builders/Wells Fargo Housing Market Index rose to 47, a one-point increase from December. This optimism comes as some builders anticipate an improved regulatory environment and better economic conditions in the coming months. Others, however, remain concerned about rising material costs, tariffs, and high mortgage rates.
The index also shows that 30% of builders reduced home prices in January, a consistent trend since last July, with an average price cut of 5%. Additionally, 61% of builders used sales incentives, a figure that has remained steady since last June.
“Builders are facing continued challenges for housing demand in the near-term, with mortgage rates up from near 6.1% in late September to above 6.9% today,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “Land is expensive and financing for private builders remains costly. However, there is hope that policymakers are taking the impact of regulatory hurdles seriously and will make improvements in 2025.” Read more
