Housing Market Index Falls to One-Year Low

By the Editorial Team · Thursday, September 17, 2026

U.S. homebuilder confidence dropped to its lowest point in a year in September, falling to 32 due to higher mortgage rates, labor shortages, and rising material costs. This decline signals continued challenges in the housing market, as increased borrowing costs and supply constraints are likely to suppress builder sentiment going forward.

U.S. homebuilder confidence declined to its lowest level in a year in September, weighed down by rising mortgage rates, labor shortages, and increased material costs, according to a recent survey. The National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index (HMI) fell three points to 32, down from 35 in August. This marks the lowest reading since September 2025.

Economists had anticipated a more modest dip to 34, indicating that sentiment among homebuilders deteriorated more than expected. The report attributes the decline not only to higher mortgage rates but also to challenges stemming from labor shortages, which have been exacerbated by recent immigration enforcement measures. Additionally, rising costs linked to tariffs on imported materials have contributed to the downward pressure on builder confidence.

Mortgage rates have climbed in line with the 10-year U.S. Treasury yield, placing further strain on the housing market. The average rate for a 30-year fixed mortgage rose to 6.76 percent last week, marking the highest level in over a year, according to data from mortgage finance company Freddie Mac. This represents an increase from 6.71 percent recorded the previous week.

The combination of these factors—higher borrowing costs, tighter labor supply, and increased building expenses—is expected to keep builder sentiment subdued in the coming months. The trends reflect ongoing challenges within the housing sector amid broader economic uncertainties.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.