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uilders’ outlook for new‑home sales brightened in September, even though overall market confidence stayed flat. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) held at 32, the same as August and still below the 50 breakeven mark that signals a favorable market. Sentiment has hovered in the low‑30s since May, reflecting weak demand and affordability headwinds.

    However, expectations for the next six months improved. The HMI’s sales‑outlook subindex rose to 45, the highest since March, as mortgage rates slipped and the likelihood of a Federal Reserve rate cut this week grew. NAHB Chairman Buddy Hughes noted that the recent drop in mortgage interest should stimulate demand, even as construction costs climb. Freddie Mac data show the average 30‑year fixed rate fell 23 basis points to 6.35%, the lowest since October 2024, a move that, according to NAHB Chief Economist Robert Dietz, will ease borrowing costs for builders and developers.

    Despite these gains, strain remains. In September, nearly 40 % of builders cut prices—the highest share since the pandemic—while 65 % offered sales incentives. The average price reduction stayed at 5 %. Current single‑family sales activity, measured by the HMI, stayed steady at 34, but prospective‑buyer traffic fell to 21. Regionally, the Northeast was at 44, the Midwest edged up to 42, the South held at 29, and the West climbed to 26.

    The HMI, derived from a long‑standing monthly builder survey, gauges conditions for newly built single‑family homes; readings above 50 indicate more builders view the market as favorable than poor.