Affordability concerns already pushed the index down from 39 in December, with January’s report highlighting broad-based softness in sales expectations and buyer traffic. In February, those pressures persisted even as inflation eased and borrowing costs drifted lower from 2025 peaks.
Builders leaned on incentives as buyers held back
NAHB’s latest survey showed that 36% of builders reported cutting prices in February, down from 40% in January but still a historically elevated share. Average discounts held at 6%. Sales incentives of some kind were used by 65% of respondents for an 11th consecutive month above 60%.
“Builders reduced their expectations for future sales as buyers report affordability challenges, which is contributing to declining consumer confidence for the overall economy,” NAHB chairman Buddy Hughes, a builder from Lexington, N.C., said.
“While the majority of builders continue to deploy buyer incentives, including price cuts, many prospective buyers remain on the sidelines. Although demand for new construction has weakened, remodeling demand has remained solid given a lack of household mobility.”
The index component tracking current sales conditions held at 41 from January to February, while the measure of expected sales over the next six months fell three points to 46.
