Homebuilder confidence sank to a 14-year low in October, while 43% of builders reported price cuts as rising mortgage rates and construction costs strained the new-home market.
The National Association of Home Builders/Wells Fargo Housing Market Index fell three points to 29, its weakest reading since June 2012, according to a report released Monday.
The seasonally adjusted index measures builders’ views of the market for newly built single-family homes. Readings above 50 indicate that more builders rate conditions positively than negatively.
More builders cut prices
The share of builders cutting prices reached its highest level during the 2020-2026 period. Among builders making reductions, the average cut held at 6% for the seventh consecutive month.
Sales incentives remained widespread: 65% of builders reported offering them in October. That marked the 19th consecutive month in which at least 60% used incentives.
The index tracking prospective buyers fell five points to 18. Buyer traffic reached its weakest level since April 2012, apart from April 2020 at the outset of the COVID-19 pandemic, according to the NAHB analysis.
The other two components also declined. Builders’ assessment of current sales fell two points to 33, while their expectations for sales over the next six months dropped five points to 32.
Dallas-Fort Worth sales weaken
North Texas’ broader single-family housing market also slowed in September. Sales fell 7% from a year earlier to 6,759, while pending sales dropped 19% to 5,536, according to the MetroTex Association of Realtors’ October 16 update.
The median sales price dipped 1% to $385,000, although the average price rose 4% to $509,534. The market held 4.3 months of inventory. Changes in the mix of homes sold may help explain the split between average and median prices, MetroTex said.
New construction represents a substantial share of the region’s housing choices. Newly built homes accounted for 31% of Dallas-Fort Worth-Arlington listings from January through June 2026, according to a Realtor.com analysis. During that period, median asking prices for new homes averaged 9.8% above those for existing homes.
What higher rates cost North Texas buyers
The average rate on a 30-year fixed mortgage stood at 7.40% on October 15, up from 6.66% on August 27, Freddie Mac’s weekly survey shows.
For a North Texas buyer borrowing $400,000 over 30 years, that increase raises the monthly principal-and-interest payment from approximately $2,571 to $2,770, about $199 more each month, according to calculations by The Dallas Express.
That comparison assumes the same loan amount and repayment term. It excludes property taxes, homeowners insurance and other housing costs.
The Dallas Express reported a 6.11% average mortgage rate in March. Freddie Mac’s latest reading stands 1.29 percentage points higher.
Higher costs weigh on builders
Builders also face more expensive construction financing, building materials and diesel, along with worsening labor and lot conditions, NAHB chief economist Robert Dietz wrote in the Eye on Housing analysis.
Demand for new homes persists, but financing costs and weaker consumer confidence continue to keep prospective buyers from purchasing, the analysis said. Federal regulatory reform efforts are easing some of builders’ cost pressures, it added.
More than one-third of builders reported immigration enforcement activity in their markets during the previous month. NAHB attributed construction delays and some legal workers’ reluctance to report to work to that activity.
In the South, which includes Texas, the three-month moving average for builder confidence fell one point to 30. All four regions posted declines in their three-month averages, with the Midwest at 40, the Northeast at 38 and the West at 26.
Provided by Dallas Express
