US home builder sentiment ticks up in August but remains weak overall

US home builder sentiment ticks up in August but remains weak overall

Mon, August 17, 2026 at 5:02 PM GMT+3 2 min read

Aug 17 (Reuters) - U.S. home builder sentiment unexpectedly ticked higher in August, but residential construction firms' confidence remains weak overall, weighed down by economic uncertainty, high mortgage rates and steep building costs ‌aggravated by the U.S.-led war with Iran, a survey showed on Monday.

The National Association of Home ‌Builders/Wells Fargo Housing Market index rose one point to a reading of 35 this month from July's unrevised level of 34. Economists polled by ​Reuters had forecast the index would decline for a third straight month to 33.

A NAHB subindex measuring current sales of single-family homes ticked up to 39, the highest since May, from 37 in July, while measures of future sales and prospective buyer foot traffic were both unchanged.

On a regional basis, sentiment edged up in the Northeast, South and West ‌and was unchanged in the Midwest.

The national ⁠index level in August marked the 16th straight month it has remained below 40, the longest such stretch since 2012. Indeed, the index has not breached the 50 level demarking ⁠business conditions that builders consider to be positive in more than two years.

"While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty," NAHB Chairman Bill Owens, a home builder and remodeler from ​Worthington, ​Ohio, said in a statement. "Rising gas and diesel prices are ​pushing up material costs, and spec home building ‌remains weak as many prospective buyers stay on the sidelines."

U.S. gasoline prices - driven higher by disruptions to global energy markets caused by the Iran war - remain above $4 a gallon on average, about 30% higher than this time last year, according to AAA. Meanwhile, the diesel fuel used widely to power construction vehicles and equipment is averaging $5.45 a gallon, nearly 50% higher than last August.

The residential real estate market remains in a deep rut, with high mortgage ‌interest rates and limited supply of homes on the market hurting ​affordability and sales rates.

The contract rate on a 30-year fixed-rate mortgage, ​the most popular U.S. home loan, ticked lower ​in the week ended August 7 for the first time since mid-June, the Mortgage Bankers ‌Association reported last week. Still, at 6.77% it ​remains near the highest in ​more than a year.

Against that backdrop, builders of new homes are turning to price cuts and other incentives to support sales.

"Our latest builder survey continues to show signs of weakness in the home building market," ​NAHB Chief Economist Robert Dietz said. "August ‌marked the 16th straight month that at least 30% of builders reported cutting prices to support demand."

The ​average price reduction was 6%, unchanged from July. Nearly two-thirds of builders offered some form ​of sales incentive.

(Reporting By Dan Burns; Editing by Chizu Nomiyama)