Builders Are Feeling Pretty Good About Single-Family Homes

NAHB’s Housing Market Index (HMI) rose to 46 in November, marking its highest level since April 2024.
Confidence in current sales, future sales, and buyer traffic all improved, with significant gains seen in the Northeast and Midwest.
31% of builders are still cutting new home prices, but recent price cuts are slightly smaller compared to October.

Key Takeaways

As reported by GlobeSt, the November National Association of Home Builders (NAHB) survey shows growing builder confidence in the U.S. single-family home market.

Survey Says

The Housing Market Index (HMI), which gauges builder sentiment, climbed to 46, up from 43 in October. While still below the break-even mark of 50, the HMI is at its highest since April, when it briefly crossed into positive territory.

The index tracks three components: current single-family home sales, sales expectations for the next six months, and prospective buyer traffic. All three metrics saw gains in November. Notably, future sales expectations jumped from 57 to 64, signaling growing optimism among builders.

Regional Trends

Confidence levels improved significantly in the Northeast (from 52 to 59) and the Midwest (from 43 to 49). However, the South and West regions showed declines, with the West seeing the steepest drop (from 44 to 39).

Despite these regional differences, the 3-month moving average showed stability or growth in all markets, with the West remaining unchanged (at 41).

Price Cuts, Incentives

Builders continue to adjust their pricing strategies to attract buyers, though the severity of price cuts is easing. In November, 31% of builders reported reducing home prices, down from previous months, with the average price cut falling to 5%, compared to 6% in October.

The use of sales incentives also fell slightly, from 62% in October to 60% in November, reflecting cautious optimism among SFR builders.

Industry Outlook

NAHB chairman Carl Harris attributed the improved sentiment to the recent election results, noting that builders expect regulatory relief under the incoming Republican Trump administration.

“Builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry,” Harris explained.

However, NAHB chief economist Robert Dietz urged caution, highlighting persistent headwinds such as labor shortages, limited buildable lots, and high material costs. Rising long-term interest rates and policy uncertainty under the new administration also pose challenges.