The confidence index of American home builders unexpectedly dropped to a two-and-a-half-year low. Nearly 40% of companies are lowering prices to combat high interest rates and economic uncertainty.

The confidence of American home builders unexpectedly fell to the lowest level in two and a half years in June. According to the Housing Market Index jointly released by the National Association of Home Builders (NAHB) and Wells Fargo, the index dropped from 34 points in May to 32 points, the lowest level since December 2022. Economists surveyed by foreign media had originally expected the index to rebound to 36 points, falling far short of expectations. The survey covers multiple indicators including current sales conditions, future sales expectations, and buyer foot traffic, all of which showed declines. Regionally, only the Northeast saw a slight increase in confidence, while confidence in the South, Midwest, and West regions declined overall. NAHB Chief Economist Robert Dietz pointed out that high inventory levels and potential buyers waiting for more affordable prices are suppressing home price growth, and even causing decreases in prices in more and more markets. He stated, "Given the current market conditions, NAHB expects a decline in single-family housing starts in the United States in 2025." Loan rates remain high. According to data from housing finance agency Freddie Mac, the average rate for a 30-year fixed-rate mortgage (the most popular type of mortgage) was 6.84% last week, falling within the range of 6.60% to 7.04% over the past six months. NAHB Chairman, Buddy Hughes, a builder and developer from Lexington, North Carolina, said, "Due to high mortgage rates, Trump administration tariff policies, and overall economic uncertainty, more and more homebuyers are choosing to wait and see. To address affordability issues and attract hesitant potential buyers to the market, more and more builders are having to promote sales through price cuts." According to the NAHB survey, 37% of builders chose to lower prices in June, the highest percentage since the association began tracking the data monthly in 2022. This percentage was 34% in May and 29% in April. Although the average price cut remained at 5%, the percentage of builders using various sales incentives increased from 61% in May to 62% in June.