United States homebuilder sentiment rose in October to its highest point since April, amid a decline in mortgage rates.
Builders’ confidence in the newly-built housing market was 37 in October, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. This is an increase of five points from the previous month.
“While recent declines for mortgage rates are an encouraging sign for affordability conditions, the market remains challenging,” said NAHB Chairman Buddy Hughes.
“The housing market has some areas with firm demand, including smaller builders shifting to remodeling and ongoing solid conditions for the luxury market. However, most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”
The 30-year fixed mortgage rate fell from around 6.5% at the start of September to 6.3% in early October, surrounding the Federal Reserve’s September interest rate cut.
It dropped again to 6.27% last week, slightly above the 2025 low recorded in September.
Builder sentiment gained a three-month average of two points across all regions except the Midwest, which remained stable at 42. The Northeast’s sentiment index leads, at 46.
All Housing Market Index metrics rose in October. Current sales conditions sentiment was up four points to 38, future sales expectations increased by nine points to 54, and the prospective buyers traffic gauge grew by four points to 25.
In October, 38% of builders said they had cut prices, according to NAHB’s survey.
The U.S. Census Bureau’s September housing construction data would be due this week, but has been suspended due to the ongoing government shutdown. NAHB has estimated around a 3% increase in single-family housing permits for September.
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