Homebuilder confidence ticks down amid economic uncertainty

Homebuilder confidence is now at its lowest level since September 2025 amid rising mortgage rates, economic uncertainty and shaky consumer confidence. 

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI)’s builder confidence gauge remained negative in April, falling four points to a reading of 34. 

The drop in homebuilder confidence comes as builders near the apex of the spring selling season. Builders reported cautious optimism and “green shoots” during the International Builders Show in February, but the conflict with Iran appears to have stalled any momentum, at least for now. 

It’s not only about rising mortgage rates. Higher gas prices and fears over inflation pushed consumer confidence to a record low this month, according to a recent University of Michigan survey. 

Jackson Su, co-managing partner at Bridge Tower Properties and its subsidiary, Westfield Homes, said that his team had an active start to the year and is still seeing conversions and traffic. But rising mortgage rates over the past several weeks have impacted demand as many buyers take a wait-and-see approach. 

“A modest move in rates shows up immediately with buyer behavior and conversion, so that’s the hesitation point for commitment and conversion,” Su told HousingWire’s The Builder’s Daily. 

According to NAHB, current sales conditions fell four points, sales expectations for the next six months dropped seven points, and traffic from prospective buyers declined by three points.

The survey also found that 36% of builders cut prices in April, with an average price reduction of 5%, largely unchanged from prior months. About 60% of builders reported using sales incentives, representing the 13th consecutive month with a share of at least 60%. 

“The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs and declines for consumer confidence have slowed the market,” NAHB Chairman Bill Owens said in a statement. 

Additionally, the BTIG/HomeSphere monthly homebuilder survey of small and midsized homebuilders, released earlier this week, found that demand in March cooled after early-year gains in January and February. More builders reported year-over-year sales declines, consumer traffic ticked down and sales versus internal expectations weakened, the survey indicated.

But in a nation of more than 340 million people, not all markets are created equal. Ken Krivanec, president of Tri Pointe Homes’ Washington and Utah division, told The Builder’s Daily that Utah is performing markedly better than Washington right now. 

In Utah, a high-growth state that Tri Pointe entered less than three years ago, there is still strong demand, Krivanec said. But the Seattle market is more challenged, he explained, with affordability posing a big concern, and layoffs in the tech sector impacting the local economy and housing market. 

Another big issue in the Seattle market is the Trump administration’s homebuying restrictions on individuals with an H-1B visa. Last year, the administration began prohibiting H-1B visa holders from accessing mortgages insured by the Federal Housing Administration (FHA). This policy change has had a noticeable impact in the Seattle area, which has a high concentration of high-income workers with an H-1B visa. 

Tri Pointe’s more established move-up and luxury buyers aren’t immune to economic uncertainty or mortgage rate volatility either. 

“Affordability is a challenge in general. When you look at that, it is the interest rates, but then there’s the consumer confidence, which is something that in Seattle is lower than it is in Utah. And that’s because gas is over $5 a gallon,” Krivanec said.