Builder Sentiment Rises as Rates Fall

(Illustration courtesy of NAHB)

Builder confidence in the market for newly built single-family homes edged up slightly in September, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

The increase broke a string of four consecutive monthly declines, NAHB reported.

“Thanks to lower interest rates, builders now have a positive view for future new home sales for the first time since May 2024,” NAHB Chairman Carl Harris said. But he noted the cost of construction remains elevated relative to household budgets, holding back some enthusiasm for current housing market conditions.

“With inflation moderating, the Federal Reserve is expected to begin a cycle of monetary policy easing this week, which will produce downward pressure on mortgage interest rates and also lower the interest rates on land development and home construction business loans,” NAHB Chief Economist Robert Dietz said. “Lowering the cost of construction is critical to confront persistent challenges for housing affordability.”