Despite brighter prospects, builders continued to rely on price reductions and incentives to attract buyers. In September, 39% of builders reported cutting prices, the highest share since the pandemic, up from 37% in August. The average price cut held steady at 5%, a trend in place since last November. Sales incentives were used by 65% of builders, nearly unchanged from the previous month.
Regionally, builder sentiment was mixed. The Northeast held at 44, the Midwest edged up to 42, the South remained at 29, and the West ticked up to 26. The HMI, based on a survey running for over 40 years, remains a key barometer for the new-home market, with any reading below 50 signaling more pessimism than optimism among builders.
The US housing market is still facing affordability issues, low inventory, and changing buyer needs. New figures from the Census Bureau and US Department of Housing and Urban Development (HUD) showed housing starts fell sharply in August, dropping to an annual rate of 1.31 million—down 8.5% from July and 6% from last year. Building permits also slipped to 1.31 million, a 3.7% decrease from July and 11.1% lower than August 2024. This slowdown comes as the job market weakens and unsold homes pile up.