Soft spring selling season takes a toll on builder confidence
Builder confidence in the market for newly built single-family homes declined sharply in May, with the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) dropping to 34, the lowest level since December 2022. This downturn reflects growing concerns over elevated interest rates, tariff-related uncertainties, and rising building material costs. Notably, 90% of the survey responses were collected before the May 12 announcement of a 90-day U.S.-China tariff reduction, which may influence future sentiment. In response to market challenges, 34% of builders reported cutting home prices, and 61% utilized sales incentives to attract buyers. Regional confidence levels varied, with the West experiencing the most significant decline, falling two points to 33.
