WASHINGTON — Economic uncertainty coupled with rising building material costs and interest rates resulted in a sharp decline in builder sentiment in April as the housing market enters into the heart of the spring buying season.

Builder confidence in the market for newly built single-family homes fell four points to 34 in April, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the lowest level since September 2025.

“Builder sentiment has fallen back in spring as buyers face ongoing elevated interest rates and growing economic uncertainty,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market.”

“With oil prices higher in the U.S., 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel,” said NAHB Chief Economist Robert Dietz. “Energy costs make up approximately 4% of residential construction material input and service costs.  With near-term economic risks elevated, 70% of builders reported challenges pricing homes given uncertainty about material costs.”

The latest HMI survey also revealed that 36% of builders cut prices in April, down slightly from 37% in March. The average price reduction was 5%, down from the 6% figure in March. The use of sales incentives was 60% in April, down from 64% in March, and marking the 13th consecutive month this share has reached 60% or higher.

Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three of the major HMI indices posted losses in April. The HMI index gauging current sales conditions fell four points to 37 from March to April, the index measuring future sales dropped seven points to 42 and the index charting traffic of prospective buyers posted a three-point decline to 22.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 42, the Midwest dropped two points to 41, the South held constant at 35 and the West fell three points to 29.