US housing market sentiment hits crisis levels as NAHB index falls to 32

The NAHB Housing Market Index fell 3 points in September to 32, matching the lowest readings recorded since the December 2022 low. The index has now stayed below 50 for 29 consecutive months, meaning more builders view conditions as poor than good, and below 40 for 17 straight months, the longest such streak since 2012.

The deterioration was broad-based. Current sales fell 4 points to 35, while future sales expectations dropped 4 points to 37, their lowest since early 2023. Builders are also adjusting pricing and incentives: 38% reduced prices this month, up from 35% in August, while the average price cut remained at 6% for a sixth consecutive month. Sales incentives became more common, rising to 66% of builders from 63% previously.

Elevated borrowing costs, higher material costs, rising gas and diesel prices, and persistent labor shortages are weighing on the market, reinforcing signs that the US housing slowdown is deepening.