Skip to content
etf.net

EconomyNews

Builder confidence falls to 32 as more builders cut prices

The NAHB/Wells Fargo Housing Market Index fell three points to 32 in September 2026, and 38% of builders cut prices.

· 2 min read · By ETF.net Research

The wooden frame of a large new house under construction stands beneath a heavy, overcast sky.

Key takeaways

  • Builder confidence fell again, staying deep in the range where most builders call conditions poor.
  • Nearly four in ten builders are cutting prices, and two-thirds are offering incentives, the most since December.
  • Builders' expectations for the next six months dropped hardest, as mortgage rates kept climbing.
  • Homebuilder ETFs were up slightly on the day but are down sharply over the past month.

More builders are cutting prices to make a sale. 38% reduced prices in September, up from 35% in August, and the average cut stayed at 6% for a sixth consecutive month, the National Association of Home Builders said Wednesday. 66% used sales incentives, up from 63% in August and the highest share since 67% in December 2025.

The NAHB/Wells Fargo Housing Market Index, scored from 0 to 100, fell three points to 32. A reading above 50 means more builders view conditions as good than poor. In August, NAHB chief economist Robert Dietz said the index had been below 40 for 16 consecutive months, after a stretch the association in July called the longest since 2012. September’s 32 remains in that range.

Sales expected over the next six months fell six points to 37, the largest drop among the three components of the index, and below the 45 reading in September 2025. Freddie Mac’s 30-year fixed-rate mortgage averaged 6.76% as of September 10, up from 6.71% the prior week and 6.35% a year earlier. Barron’s said that as mortgage rates rise, builders use incentives to boost home sales at the expense of their margins.

As of 10:51 a.m. Eastern, the U.S. home-construction fund ITB was at $89.76, up 0.72%, and the fund that tracks the S&P Homebuilders Select Industry Index, XHB, was at $98.29, up 0.54%. D.R. Horton, 16.8% of ITB, was up 1.5%. Wednesday’s survey has not moved those prices.

ITB and XHB fell to a Sept. 10 low, then bounced

ITB and XHB, Sept. 2–15, 2026, rebased to 100

ITB and XHB fell to a Sept. 10 low, then bounced: ITB from 92.82 to 89.12; XHB from 101.17 to 97.76. Use the arrow keys to read each point.30-year print
Sep 2Sep 15
  • ITB · 89.12
  • XHB · 97.76

Both bottomed Sept. 10 and recovered only part of the drop.

Over the past month, ITB has a total return of -7.6% and XHB of -9.2%. The Federal Reserve announces its rate decision at 2 p.m. Eastern. Zacks Investment Research said homebuilders are among the groups that face pressure under a hike, which would be the first increase since 2023.

ETFs in this story

DITBiShares U.S. Home Construction ETF35/100BXHBState Street SPDR S&P Homebuilders ETF55/100

Frequently asked questions

What does a reading of 32 mean?

The index runs from 0 to 100, and anything above 50 means more builders see conditions as good than poor.

Why are builders cutting prices?

Mortgage rates are rising, the 30-year averaged 6.76%, and builders use price cuts and incentives to keep sales moving at the expense of their margins.

Did the survey move homebuilder ETFs?

No, ITB and XHB were both modestly higher on the day and the survey has not moved those prices.

What else is hanging over the group?

The Fed's rate decision comes Wednesday afternoon, and Zacks said homebuilders are among the groups that face pressure under a hike.

Related articles