Home Builder Confidence Remains Strained

With material costs rising and mortgage rates elevated, builder sentiment remained weak in June. According to the National Association of Home Builders/Well Fargo Housing Market Index, builder confidence in new single-family homes fell by two points to 35 in June, marking the 14th straight month that the index has been below 40.

Builders continue to entice buyers through sales incentives

As sentiments across the industry drop, incentives are becoming an increasingly common tactic to improve home sales. In June, 65% of builders recorded using sales incentives, up from 61% the month prior. Additionally, 35% of builders reported cutting prices, an increase from 32% in May. In June, the average price reduction was 6%.

Builder sentiment varies across regions

Like the nationwide index, builder sentiment fell in both the South and West to a respective 33 and 27. Meanwhile, the index in the Northeast rose two points to 44, and in the Midwest, it held steady at 43.