A record percentage of homebuilders are cutting prices

A record 41% of homebuilders reported cutting prices this month to entice skittish consumers and work through a glut of new homes in some parts of the country.

The share of builders slashing prices reached a post-pandemic high, according to the National Association of Home Builders/Wells Fargo Housing Market Index, and topped 40% for the first time on record. The average discount was 6%, unchanged from a month earlier.

Sixty-five percent of builders reported using sales incentives, such as mortgage rate buydowns and funds toward upgrades and closing costs, a share that’s held steady since September.

Homebuilders have been dealing with a sluggish housing market, wary consumers, and unknowns around tariffs and construction costs throughout 2025. They’ve responded by reducing single-family housing starts this year, although NAHB chief economist Robert Dietz said the trade group is forecasting a slight increase in 2026 because builders’ assessment of future sales conditions remains slightly positive.

The index’s measurement for builder confidence in the new single-family home market rose one point to 38 this month, but remains in deeply negative territory. An index reading below 50 indicates that more builders view conditions as poor than good.

“While lower mortgage rates are a positive development for affordability conditions, many buyers remain hesitant because of the recent record-long government shutdown and concerns over job security and inflation,” NAHB chairman Buddy Hughes said in a statement.

“More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence.”

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