The builder sentiment index has remained low for 15 consecutive months, with readings near historic lows. The One Big Beautiful Bill Act aimed to foster growth in housing construction, amidst challenges like high mortgage rates and poor affordability. Despite some improvements in present sales conditions and future outlooks, new-home sales experienced a significant decline in May. A global tariff regime has also impacted raw material prices, affecting builders. Overall, the housing sector faces difficulties, with single-family permits down 6% year-to-date and buyer traffic at a two-year low.
The index remains near its low points in April 2020 (30) and June 2012 (29) and it's the 15th straight month of negative sentiment.
The housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates.
New-home sales have been a relative bright spot in a housing market plagued by high mortgage rates and sky-high prices, but they cratered in May.
Sentiment related to buyer traffic dropped from 21 to 20, indicating ongoing challenges in attracting potential homebuyers.
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