It’s probably fair to call 2025 one of the worst years ever for homebuilder sentiment in the US.
That’s ironic because… well, do I really have to spell it out?
Ok fine, I’ll spell it out: It’s ironic because there’s a builder in the Oval Office, and not just any old builder. Rather, the builder small builders have a ridiculous habit of idolizing.
But just as Donald Trump should’ve been bullish for small business sentiment but ultimately wasn’t, “Trump 2.0” has so far failed to cheer up legions of depressed local builders.
Apropos, the marquee gauge of national builder moods closed out the year at 39, a mile below the threshold separating net optimism from pessimism.
As the figure shows, the NAHB headline spent all of 2025 below 50, and most of the year deeply underwater.
December’s print was 39, a touch above November’s readout but terrible all the same. Buddy Hughes, the current NAHB chair, blamed unrelenting upward pressure on material prices, which he attributed, in part anyway, to tariffs. The trade levies, Hughes said Monday, “are having serious repercussions on construction costs.”
More broadly, the housing market’s very, very challenging even considering the seasonal. New listings fell 1.7% in the four weeks to December 7 versus the same period a year ago, according to Redfin. That was the largest drop in more than two years. The proximate cause: No one’s buying, or at least not without asking for a big price break.
Recall that sellers outnumbered buyers by almost 40% in October, and some 85,000 homes were pulled off the market in September, up 28% YoY and the most for any September in nearly a decade.
“Pending home sales are down 4.1% from a year ago, the biggest decline in 10 months [and] the homes that are selling are taking a long time to do so,” Dana Anderson remarked, citing “widespread economic uncertainty and high housing costs.”
Monday’s NAHB update showed builders continue to lean heavily on incentives to lure buyers. 67% said they used some manner of inducement or sweetener to entice buyers this month, the most for any survey of the post-pandemic era. 40% cut prices, down from 41% in November.
The release wasn’t all bad news. The closely-watched forward-looking metric printed above 50 for a second month. Hope springs eternal, but it ain’t a strategy.
