U.S. Homebuilder Confidence Inches Up In Line With Estimates In December

(RTTNews) - The National Association of Home Builders released a report on Monday showing a modest improvement by U.S. homebuilder confidence in the month of December.

The report said the NAHB/Wells Fargo Housing Market Index crept up to 39 in December after inching up to 38 in November. The uptick, which matched economist estimates, lifted the index to its highest level since hitting 40 in April.

Despite the modest increase, the NAHB noted sentiment levels were below the breakeven point of 50 every month in 2025.

"Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence," said NAHB Chairman Buddy Hughes.

He added, "Meanwhile, builders are contending with rising material and labor prices, as tariffs are having serious repercussions on construction costs."

The uptick by the headline index came as the index measuring future sales and the index gauging current sales conditions both inched up by one point to 52 and 42, respectively, while the gauge charting traffic of prospective buyers held steady at 26.

The NAHB said the latest HMI survey also revealed that 40 percent of builders reported cutting prices in December, marking the second consecutive month the share has been at 40 percent or higher.

The average price reduction was 5 percent in December, down from 6 percent in November, the report said, while the use of sales incentives was 67 percent in December, the highest in the post-Covid period.

"In positive signs for the market, builders report that future sales expectations have been above the key breakeven level of 50 for the past three months and the recent easing of monetary policy should help builder loan conditions at the start of 2026," said NAHB Chief Economist Robert Dietz.

He added, "However, builders continue to face supply-side headwinds, as regulatory costs and material prices remain stubbornly high. Rising inventory also has increased competition for newly built homes."