Home Builder Confidence Inches Up in November

Home builders less pessimistic

The lack of starter-level housing for sale is perhaps the biggest detriment to home buyers today.

That scarcity’s cascading effect drives up competition and then, prices. But could help be on the way?

A leading indicator of housing inventory bounced back for the second month in a row.

Home builder confidence remains low

Home builder sentiment ebbs and flows based on consumer demand, market conditions, shifting costs, and supply chain status.

Every month, the National Association of Home Builders (NAHB) and Wells Fargo survey NAHB members to measure this sentiment on a 0-100 scale in their Housing Market Index (HMI) report. The survey comprises three components for single-family housing: current home sales, home sales over the next six months, and traffic of prospective buyers.

In November, builder confidence rose to a score of 38 from 37 in October, but trails the year-ago mark of 46.

“While lower mortgage rates are a positive development for affordability conditions, many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation,” said Buddy Hughes, chairman at NAHB. “More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence.”

The table below shows the HMI scores from the last 12 months:

The three index components experienced mixed growth month-over-month. Current sales increased to 41 from 39, sales in the next six months decreased to 51 from 54, and prospective home buyer traffic rose to 26 from 25.

Broken down regionally, home builders in the Northeast had the most optimism with a three-month moving average score of 48. Next came HMIs of 41 in the Midwest, 34 in the South, and 30 in the West.

“We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment,” said Robert Dietz, chief economist at NAHB. “After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”

What other indicators of housing inventory say

Realtor.com’s monthly housing market report showed active home listings increased 15.3% annually to a total of 1.1 million in October.

Among the 50 largest cities in the U.S., Washington, D.C. saw a 38.2% yearly jump in active listing count, trailed by 36.5% in Charlotte, N.C., and 35.1% in Las Vegas. On the other side of the coin, Chicago and Grand Rapids experienced annual declines of 1.8% and 0.6%, respectively. San Francisco finished above the pair with a 2.3% annual gain.

For a look ahead, the Census Bureau and Department of Housing and Urban Development put out a joint Monthly New Residential Construction Report.

With the government shutting itself down, the newest information isn’t available. September had the latest report release, covering August data. The three leading indicators of housing inventory were as follows:

First, building permits hit a seasonally adjusted annual rate (SAAR) of 1.312 million in August. That figure decreased 3.7% month-over-month and 11.1% year-over-year.

Next, housing starts reached a SAAR of 1.307 million, down 8.5% monthly and 6% annually. Lastly, a SAAR 1.608 million houses were completed in August, 8.4% higher than July but 8.4% below August 2024.

The bottom line for home buyers

Between low affordability and not enough listings, home buying has been a challenging venture for prospective borrowers.

If you’re a house hunter, it’ll be helpful to grab every advantage you can. Always be prepared so you can move fast, negotiate your mortgage rate to lower your payments, and see if you qualify for down payment and/or closing cost assistance.

If you’re ready to take the next step to homeownership, reach out to a local mortgage professional.