Full Breakdown
Builder Confidence Slumps to 35 in June, Extending Low
6/16/2026, 2:02:51 PM
Builder Sentiment Hits Historic Low
The NAHB released its June Housing Market Index (HMI) at 35, the lowest since the 2011-12 foreclosure crisis. This marks the 14th straight month the index stayed below the 40-point threshold and the 15th month that over 60 % of builders used sales incentives to move inventory.
Affordability, Regulation, and Supply Shortfall
Builders face rising material costs, a 6.52 % 30-year mortgage rate (Freddie Mac), and a national deficit of roughly 1.2 million homes. A NAHB study cited by Chief Economist Robert Dietz finds regulation, taxes and fees add over 26 % to the price of a single-family home. Bankrate analyst Stephen Kates notes that regulatory burdens vary by state, with California described as “extremely high.” Home prices have risen about 50 % over six years; median resale $429,300 and new $422,500.
Key Metrics
The HMI fell to 35 in June, with components at 38 for current sales, 45 for future sales, and 25 for buyer traffic. Thirty-five percent of builders cut prices, a 6 % reduction, while 62 % used sales incentives for the 15th month in a row. Regional averages: Northeast 44, Midwest 43, South 33, West 27.
Official Statements & Policy Proposals
NAHB Chairman Bill Owens urged Congress to pass a housing package that includes the CONSTRUCTS Act to address labor shortages and the Energy Choice Act to block state bans on natural-gas heating in new homes. Chief Economist Robert Dietz said easing permitting bottlenecks, density limits and zoning rules could lower the 26 % regulatory cost premium. NAR chief economist Lawrence Yun warned that homeowners locked into lower mortgage rates are reluctant to sell, tightening supply.
Market Critique
Stephen Kates stressed that “homebuyer traffic is a major pain point for builders” and that regulatory costs vary widely across states. He argued builders cannot “sit on something for a couple of years and wait for the market to recover,” prompting aggressive price cuts and incentives. Kates added that financially capable buyers may still find the market “a great time to buy.”
Verbatim Quotes
- “Costly and inefficient regulatory policy is clearly impeding the ability of builders to increase the housing supply,” — Robert Dietz, NAHB Chief Economist
- “With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for home building,” — Bill Owens, NAHB Chairman
- “And Kates said homebuyer traffic is a “major pain point” for builders.” — Stephen Kates, Bankrate Financial Analyst
- “They can't sit on something for a couple of years and wait for the market to recover,” — Stephen Kates, Bankrate Financial Analyst
Outlook
The NAHB expects Congress to consider the pending housing package, including the CONSTRUCTS and Energy Choice Acts, in the coming weeks. Analysts anticipate that easing regulatory barriers could modestly improve builder sentiment, while further declines in mortgage rates would be needed to ease the underlying affordability gap.
