Builder sentiment fell two points to 37 in January; 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.
“While the upper end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors,” said NAHB Chairman Buddy Hughes. “Buyers are concerned about high home prices and mortgage rates, with down payments particularly challenging given elevated price to income ratios.”
Regarding the three components of the homebuilder index, sales expectations fell three points to 49; current sales conditions declined one point to 41; and buyer traffic dropped three points to 23.
Forty percent of builders reported cutting prices in January compared with 40% in December 2025, 41% in November 2025, and 38% in October 2025. The average price discount was 6%, up from 5% in December 2025. Sixty-five percent of builders were using sales incentives other than price cuts to improve sales in January, which is down from 67% in December 2025; this marks the 10th consecutive month the use of sales incentives has exceeded 60%.
