Builder sentiment fell two points to 36 in February; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
“Housing affordability remains an ongoing challenge at the start of 2026,” said NAHB Chief Economist Robert Dietz. “The solution for the housing market is the enactment of policies that will bend the construction cost curve and enable additional supply of attainable housing. On the positive side, easing inflation should continue to allow lower interest rates for mortgages and builder loans.”
Regarding the three components of the homebuilder index, current sales conditions were unchanged at 41; sales expectations fell three points to 46; and buyer traffic dropped two points to 22.
Thirty-six percent of builders reported cutting prices in February compared with 40% in January, 40% in December 2025, and 41% in November 2025. The average price discount was 6%, which is unchanged from January. Sixty-five percent of builders were using sales incentives other than price cuts to improve sales in February, which is unchanged from January; this marks the 11th consecutive month the use of sales incentives has exceeded 60%.
