Full Breakdown
U.S. Homebuilder Sentiment Falls to One-Year Low Amid Rising Mortgage Rates
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Sentiment Decline in September 2026
On September 16, the National Association of Home Builders (NAHB) and Wells Fargo reported that their Housing Market index slipped to 32, the lowest level since September 2025. The drop follows a three-point decline from August’s reading of 35 and undercuts economists’ forecast of a 34 reading.
Factors Driving the Drop
The survey linked the weakening sentiment to several concurrent pressures. Mortgage borrowing costs have risen sharply, with Freddie Mac data showing the 30-year fixed rate averaging 6.76%—the highest in more than a year. At the same time, the 10-year Treasury yield hit 5.041%, its peak since July 2007, reflecting expectations that the Federal Reserve will raise rates to tame inflation tied to the U.S.–Israel conflict with Iran. Builders also cite higher material costs, elevated gas and diesel prices, and persistent labor shortages. NAHB chairman Bill Owens noted that stricter immigration enforcement is deterring legal workers from reporting to construction sites, compounding the labor gap.
Key Metrics
- Housing Market index: 32 (September) vs. 35 (August).
- 30-year fixed mortgage rate: 6.76% (average last week).
- 10-year Treasury yield: 5.041% (Tuesday).
- Builders cutting prices: 38% of respondents, up from 35% in August.
- Average price reduction: steady at 6% for six consecutive months.
- Use of sales incentives: 66% of builders, up from 63% in August.
Official Statements & Responses
Bill Owens emphasized that “buyer traffic has weakened across much of the country, largely because of rising mortgage rates.” He added that higher borrowing costs and still-elevated home prices are pushing potential homeowners to the sidelines, while the surplus of unsold new homes discourages builders from initiating new projects.
Verbatim Quotes
- “Buyer traffic has weakened across much of the country, largely because of rising mortgage rates,” — NAHB — NAHB