The U.S. homebuilding sector saw a decline in company expectations at the beginning of the year, affected by weak buyer purchasing power despite the start of a decrease in mortgage interest rates.
The Housing Market Index issued by the National Association of Home Builders in cooperation with Wells Fargo recorded 37 points in January 2026, down two points. The index continues to remain below the 50-point threshold that separates expansion from contraction, influenced by high home prices, construction costs, and interest rates, especially in the low- and mid-priced segments.
While demand for luxury homes remained relatively stable, buyers faced increasing financial difficulties due to rising home prices and stagnant income growth. This resulted in a decrease in the number of qualified buyers and a decline in sales.
Mortgage interest rates have begun to decline gradually. Data from Freddie Mac indicated that the average 30-year fixed rate fell to 6.06% in mid-January, the lowest level in three years.
However, most homebuilder responses were recorded before the announcement of a $200 billion initiative by Fannie Mae and Freddie Mac to support the mortgage market and reduce borrowing costs.
Despite signs of optimism regarding lower interest rates, the sector continues to face challenges related to labor shortages, limited build-to-ready land, and rising material and regulatory costs. This was reflected in the future sales index, which fell to 49 points, its lowest level since September.
In terms of pricing, 40% of homebuilders cut prices in January at the same rate as the previous month (5–6%), and companies continued to offer incentives to attract potential buyers.
The NAHB/Wells Fargo index is considered a key benchmark for analyzing the U.S. housing market and is based on monthly surveys of developers spanning more than four decades.
