US Builder Confidence for Newly Built Single-Family Homes Falls in June

Confidence among U.S. home builders has remained subdued in June as the housing market has become strained amid elevated mortgage rates and prospective homebuyers are facing affordability challenges.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, which measures builder confidence in the market for newly built single-family homes, declined two points to 35 this month, down from May, the association said in a June 15 statement.

This was the 14th straight month that the index recorded a value below 40, a streak unseen since the 2011–2012 foreclosure crisis, when there was a dramatic surge in home foreclosures, according to the association. The housing market is also under strain from high material costs.

“With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for home building,” said NAHB Chairman Bill Owens.

“Congress can help by passing the major housing package now before the Senate, along with the CONSTRUCTS Act to address the construction labor shortage.”

The housing package refers to the 21st Century ROAD to Housing Act that was passed by the House of Representatives last month and is now in the Senate. Some of the measures in the package include encouraging local zoning reforms and cutting red tape in environmental reviews. Supporters of the legislation argue it will help boost the number of new homes in the country.

Meanwhile, the CONSTRUCTS Act seeks to address existing labor shortages plaguing the housing sector by expanding residential construction training programs at technical education schools, community colleges, and other training schools, according to NAHB.

NAHB said its survey revealed that 35 percent of builders cut down prices this month, with the average discount being 6 percent. More than 60 percent used sales incentives to attract buyers, the 15th straight month that this figure was 60 percent or higher.

NAHB Chief Economist Robert Dietz cited costly and inefficient regulatory policies as impeding builders’ efforts to boost housing supply. Dietz cited a recent NAHB study that found that government regulations, fees, taxes, and other expenses added more than 26 percent to the price of an average single-family home.

“Easing permitting bottlenecks, density limits and inefficient zoning rules would help reduce costs and support the housing growth the nation needs,” Dietz said.

The Trump administration has taken action to tackle the issue of high regulatory costs.

In April, the Department of Housing and Urban Development (HUD) and the Department of Agriculture rescinded a policy on energy standards that would have added $20,000 to $31,000 to home construction costs.

Last month, HUD released the State and Local Best Practices for Home Construction Report, detailing the regulatory actions that state and local governments can take to ease home construction barriers. The measure aims to cut the cost of building properties and speed up construction timelines.

Housing Market Situation

As for the U.S. home market, sales activity in May was lower than a year back amid rising mortgage rates, real estate marketplace Zillow said in a June 4 report.

The weekly average rate of a 30-year fixed-rate mortgage rose from 6.3 percent for the week ending April 30 to 6.53 percent for the week ending May 28, based on data from Freddie Mac.

“Typical home values rose slightly (0.6 percent) on a monthly basis to $368,720. Combined with higher mortgage rates, that brought the cost of a typical mortgage to $1,861, rising 1.1 percent from April to May,” Zillow said.

“However, mortgage rates remain lower than last year.”

As such, even with the annual growth in home values, “typical mortgage costs are still 3.1 percent lower than last May,” it added.

Home sales are expected to improve in the second half of 2026, Lawrence Yun, chief economist at NAR, said during a recent forum, according to a June 16 statement from the association.

However, this prediction is contingent on the housing supply and inventory continuing to expand, the economist said, adding that the typical homeowner is expected to gain roughly $16,000 in housing wealth in 2026.