“Builder sentiment around future sales remains subdued, though it ticked up slightly in response to lower rates. Demand is there, but it’s taking incentives to coax hesitant buyers off the sidelines. Whether this momentum can be sustained remains to be seen,” Kushi said.
Still, expectations for future sales ticked up, buoyed by a 23-basis-point drop in the average 30-year fixed mortgage rate over the past month, now at 6.35%—the lowest since October 2024, according to Freddie Mac.
The Federal Reserve’s recent 25-basis-point cut could help lower borrowing costs for both developers and buyers.
Kushi cautioned against reading too much into a single month’s data. “That said, one month does not make a trend. It’s important to consider the wide confidence intervals in the data and the fact that these figures don’t account for cancellations. Nevertheless, it’s a welcome sign of buyer life and positive progress in a still-challenging market.”
Despite the August rebound, the US housing market continued to struggle with high prices, limited supply, and shifting buyer preferences. According to the Census Bureau and US Department of Housing and Urban Development (HUD), housing starts dropped in August to an annual rate of 1.31 million, down 8.5% from July and 6% from a year ago.