Homebuilder confidence hits a 14-year low.

The lowest reading since 2012

The mood among U.S. homebuilders has taken a significant hit. The National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index, which measures builder confidence, fell three points to 29 in October 2026, its lowest level since June 2012.

For context, any score below 50 means more builders see market conditions as poor than as good. The index has now been below 50 for 30 consecutive months.

What is behind the downturn

Mortgage rates have climbed above 7%, making it harder for buyers to afford homes. On top of that, inflation and higher gas prices are squeezing household budgets, reducing the number of potential buyers visiting new developments. Builders are also grappling with higher costs for materials, construction loans, and diesel fuel, which are cutting into their profits.

In response, many builders are lowering prices to attract buyers. In October, 43% of builders cut prices, the highest share since at least 2020, and 65% used some form of sales incentive.

Where it is hardest

The situation is particularly tough in the western U.S., where builders' monthly reading fell to 20, the lowest since December 2011. The Midwest offers a small silver lining: it held up best on NAHB's three-month regional average, and NAHB described it as a relatively bright spot.