Builders are cutting prices at the fastest clip in years, and they still can’t get shoppers through the door. The latest builder survey shows why buying a new home is getting harder, and why it may also be a better time to negotiate.
The NAHB/Wells Fargo Housing Market Index fell three points to 29 in October, from 32 in September. That is the lowest reading since June 2012, and the second straight monthly drop. Any reading below 50 means more builders see conditions as poor than good.
The numbers
- 43% of builders cut prices in October, the highest share in the 2020–2026 period. The average cut was 6%, unchanged for a seventh straight month.
- 65% used sales incentives, the 19th straight month at or above 60%.
- Current sales conditions fell two points to 33, a 14-year low.
- Sales expectations for the next six months fell five points to 32, the lowest since November 2022.
- Buyer traffic fell five points to 18.
Why buyers are staying away
NAHB chief economist Robert Dietz said demand persists, but higher mortgage rates, elevated construction costs and weaker consumer confidence are keeping more buyers on the sidelines.
Mortgage rates are a big piece. The 30-year fixed rate averaged 7.4% in mid-October, the highest since November 2023, according to Trading Economics. On a $400,000 loan with a 7.4% rate, principal and interest alone come to roughly $2,770 a month, compared with about $2,400 at 6%. (That is our own arithmetic, before taxes and insurance.) Our recent look at the Fed’s Oct. 27–28 meeting explains why a rate cut is not expected to fix that quickly.
What it means if you’re shopping
When builders cut prices and add perks, buyers gain leverage. A few practical ideas:
- Ask for rate help, not just a lower price. Builders often offer to “buy down” your mortgage rate, which can lower your monthly payment more than a small price cut.
- Compare the total package. Closing-cost credits, upgrades and a lower rate are worth different amounts. Get each offer in writing and compare monthly payments.
- Check the builder’s lender. Incentives sometimes require using their preferred lender, so get a quote from an outside lender as well.
- Don’t stretch. With inflation and sentiment both under pressure, leave room in your budget for taxes, insurance and repairs.
The catch
Builder sentiment is a survey, not a count of sales, and it covers new single-family homes only. Resale prices and rates in your area may tell a different story. If you are weighing a purchase, treat these figures as context rather than advice, and talk to a lender or housing counselor about your own numbers.
More on Contoh
- The Fed Meets Oct. 27–28 With a Hold Expected. Here’s What It Means for Mortgages and Savings
- Inflation Jumps to 3.7% as Gas Prices Soar. What September’s Numbers Mean for Your Money
- Consumer Sentiment Slides Toward a Record Low as Prices Bite. Here’s What the Numbers Mean