Forlorn US homebuilders weren’t feeling any better about their plight as 2026 dawned.
The last of this week’s notable macro releases from the world’s largest economy found the marquee gauge of builder moods deteriorating anew.
After ticking up in November and December, the NAHB’s index fell two points in January, erasing the prior months’ gains and slipping to the lowest since October.
January marks the 21st straight month during which sentiment was below the threshold separating net optimism from pessimism.
As the figure shows, the NAHB headline’s managed just a handful of >50 prints since the summer of 2022.
The editorial accompanying the release said “affordability concerns continue to weigh heavily with buyers, and builders continue to contend with rising construction costs.”
That, despite the 30-year fixed falling to the lowest since 2022 on the heels of Donald Trump’s announcement that the GSEs will be compelled to buy $200 billion in mortgage bonds.
This is the same story week in, week out, month after month: If the rates don’t get you, the down payment burden will. Even in the event financing costs sport a five-handle again, making a respectable down payment on the “median” home will run you $75,000. A lot of people just don’t have that.
At this point, anyone who had the credit and income to qualify and the kind of cash you need to get your foot in the door of anything other than a poorly-built starter home, already bought.
Yes, sellers outnumber buyers by ~40%, but those buyers generally don’t qualify for — let’s take a $450,000 home for example — a $360,000 loan, let alone have $90,000 in cash for a down payment.
NAHB Chairman Buddy Hughes underscored all of that on Friday. “While the upper-end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors,” he said, adding that yes, “buyers are concerned about high mortgage rates,” but it’s the down payments which are “particularly challenging.”
Speaking of down payments, Trump has another idea. “We’re going to allow people to take money out of their 401(k)s and use that for a down payment,” Kevin Hassett told state television on Friday. “The president will put the final plan out in Davos next week.”
I think most ppl can already take loans from their 401k accounts.
Next step is to order the GSEs to take higher LTVs.
Or just tell the GSEs to buy people houses. “I met with them and I said to them, I said, ‘I met a nice lady in Florida last month and she told me, she said I can’t get a house, the payment — the down payment is too high,’ so I told them we’re going to be buying her a house and a lot of other people too. We’re going to buy the houses and we’re going to buy them like you wouldn’t believe. Think of it: In Iran they don’t even have houses, they have huts — mud huts. It’s a terrible thing and then you talk about Venezuela. The guy — he was so horrible, but we went in there and we got him, they said it couldn’t be done, but we did it. You never saw that with Biden, he was too sleepy. Sleepy Joe, I call him Sleepy Joe. Right, Pete? Where’s Pete? There’s Pete. He’s doing a fantastic job.”
We are so far down the rabbit hole that I honestly have no idea if that’s a real quote.
If he would have mentioned tariffs would be paying for the homes, I’d have believed it. I was already hooked because he chose Florida haha.
That was very, very good!
A stint on Saturday Night Live is a possibility- maybe as a writer!
Nice
Bill Pulte would have got a shout out too. Maybe a mention about the GSEs doing buying and that would take care of the fraud and then Bondi would get a shout out too, but she is looking at the fraud and the wasteful spending…