Confidence dropped to its lowest level among homebuilders seen since June 2012, according to the latest National Home Builders Association/Wells Fargo Housing Market Index on Wednesday.

New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.

Builder confidence declined for the 11th-consecutive month as homebuilders continue to see little to hope for in the current housing market.

The National Home Builders Association/Wells Fargo Housing Market Index dropped five points in November, to 33, down from 38 in October, according to the NAHB. The latest results mark the lowest level since June 2012 with the exception of the onset of the pandemic in Spring 2020.

Builders are feeling the squeeze both from high construction costs and low buyer demand due to high mortgage rates, the NAHB said.

“Higher interest rates have significantly weakened demand for new homes as buyer traffic is becoming increasingly scarce,” NAHB Chairman Jerry Konter, a Savannah, Georgia-based developer said in a statement. “With the housing sector in a recession, the Biden administration and new Congress must turn their focus to policies that lower the cost of building and allow the nation’s home builders to expand housing production.”

59 percent of builders reported offering incentives to win over buyers, a dramatic increase from just September. For example, 25 percent of builders said they were paying points for buyers in November, up from just 13 percent in September. The same time frame saw mortgage rate buy downs rise from 19 percent to 27 percent, and the amount of builders reporting cutting their prices rise from 19 percent to 27 percent.

While sky-high mortgage rates have caused home prices to slow their roll, building costs are yet to follow, the NAHB said.

“Even as home prices moderate, building costs, labor and materials — particularly for concrete — have yet to follow,” NAHB Chief Economist Robert Dietz said in a statement.  “To ease the worsening housing affordability crisis, policymakers must seek solutions that create more affordable and attainable housing. With inflation showing signs of moderating, this includes a reduction in the pace of the Federal Reserve’s rate hikes and reducing regulatory costs associated with land development and home construction.”

The index is derived from a survey of home builders that asks them to rate current sales, sales expectations, and buyer traffic either “good,” “fair” or “poor.”

November saw each category chart a decrease, with current sales falling six points to 39, sales expectations falling four points to 31 and buyer traffic decreasing by five points to 20.

Email Ben Verde

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription