Builder sentiment climbed one point to 39 in December; 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.
Regarding the three components of the homebuilder index, sales expectations rose one point to 52; current sales conditions climbed one point to 42; and buyer traffic was unchanged at 26.
Forty percent of builders reported cutting prices in December compared with 41% in November, 38% in October and 39% in September. The average price discount was 5%, down from 6% in November. Sixty-seven percent of builders were using sales incentives other than price cuts to improve sales in December, which is up from 65% in November and the highest percentage in the post-COVID period.
“Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence,” said NAHB Chairman Buddy Hughes. “Meanwhile, builders are contending with rising material and labor prices, as tariffs are having serious repercussions on construction costs.”
