Homebuilder sentiment unexpectedly dims in August as mortgage rates stay high

[Couple working together on a new home]
Alistair Berg

The NAHB/Wells Fargo Housing Market Index slipped to 32 in August from 33 in July, compared with the 34 consensus, according to a report published Thursday.

“Affordability continues to be the top challenge for the housing market and buyers are waiting for mortgage rates to drop to move forward,” said Buddy Hughes, chairman of the National Association of Home Builders.

“Builders are also grappling with supply-side headwinds, including ongoing frustrations with regulatory policies connected to developing land and building homes," he added.

The survey also showed that 37% of builders said [https://www.nahb.org/news-and-economics/press-releases/2025/08/builder-confidence-plateaus-at-relatively-low-level] they cut prices in August, down from 38% in July. This share has stayed in the 27%-38% range in the last three months.

Meanwhile, the use of sales incentives rose to 66% in August from 62% in July, representing the highest percentage in the post-Covid era.

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