U.S. Homebuilder Confidence Falls to Lowest Level Since 2012

U.S. homebuilder confidence fell to 29 in October, its lowest reading since June 2012, as builders marked down sales conditions and prospective-buyer traffic for new single-family homes.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index dropped three points from September's reading of 32. Forecasts had called for a reading of 31 to 32.

All three parts of the survey weakened. The measure of current sales conditions fell two points to 33. Expectations for sales over the next six months and prospective-buyer traffic each fell five points, to 32 and 18, respectively.

The monthly Housing Market Index tracks builders' views of current sales, expected sales and potential buyer traffic. A reading below 50 means more builders view conditions as poor than good.

Price cuts and incentives remained widespread. In October, 43% of builders reduced prices, the highest share recorded from 2020 through 2026. The average reduction stayed at 6% for a seventh consecutive month. Sales incentives were used by 65% of builders, marking the 19th straight month in which at least 60% used them.

NAHB Chairman Bill Owens said mortgage rates had climbed "well above 7% in recent weeks." He also cited higher gas prices and inflation as factors weakening buyer traffic.