The impact of ongoing geopolitical tensions with Iran and its effect on oil and energy prices continues to weigh on the housing market, as homebuilder sentiment took a dip further into negative territory this month, according to the latest data from the National Association of Home Builders (NAHB).
The NAHB/Wells Fargo Housing Market Index saw builder confidence dip four points to 34 in April, the lowest level seen since September 2025. This also follows an essentially flat reading of only a one-point rise in March (to 38).
NAHB Chairman Bill Owens pointed to “elevated interest rates and growing economic uncertainty” as the reason for a further dip in sentiment this month.
“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,” he continued.
Specifically, NAHB Chief Economist Robert Dietz noted that as oil prices have risen, and gas/diesel prices in tandem, “62% of builders reported suppliers have increased building material costs.” In addition, energy costs have also been increasing, and they account for “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,” he continued.
All three of the major HMI indices also saw 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.
Regionally, the Northeast’s three-month moving average 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.
As the market remains challenging for home construction, builders revealed in the survey that they continue to make more use of price cuts and incentives. The survey reported that 36% of builders cut prices in April, down slightly from 37% in March. The average price reduction was 5%, down from 6%. The use of sales incentives was 60% in April, down from 64%, but the 13th consecutive month this share has been 60% or higher.
