United States homebuilder sentiment rose in December, but remains in the negative amid high construction costs and economic uncertainty.
Builder confidence is up one point to 39 this month per the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index. This is its highest point since April, though it has been below the breakeven level of 50 throughout 2025.
“Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence,” said NAHB chair Buddy Hughes.
“Meanwhile, builders are contending with rising material and labour prices, as tariffs are having serious repercussions on construction costs.”
The U.S.’ 10% tariffs on lumber took effect in October, along with 25% tariffs on some wooden household products like bathroom vanities. It has also imposed tariffs on steel and aluminium.
NAHB’s current sales conditions index grew by one point to 42, while the future sales index was up one point to 52.
The Northeast’s Housing Market Index dropped one point but remained highest at 47. The Midwest gained two points to 43, the South grew two points to 36, and the West was up four points to 34.
According to NAHB’s survey, 40% of builders said they had cut prices in December, down slightly from November’s 41%. This is the second consecutive month that at least 40% of builders have lowered prices since 2020.
Average price reductions also fell to 5% in December from 6% in November. The use of sales incentives reached a post-pandemic high of 67% this month.
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