NAHB/Wells Fargo Housing Market Index Drops to 34 in May 

The NAHB/Wells Fargo Housing Market Index (HMI) fell to 34 in May 2025 from 40 in April, missing expectations of 40 and marking the lowest builder sentiment since December 2022’s reading of 31. The decline reflects a lackluster spring selling season and ongoing tariff-related concerns, which have clouded the economic outlook for homebuilders. 

Current sales conditions fell eight points to 37, sales expectations in the next six months edged one point lower to 42, and traffic of prospective buyers dropped two points to 23. 

The survey, with 90% of responses collected before the May 12 announcement of temporary U.S.-China tariff reductions, highlighted builders’ struggles. “Policy uncertainty stemming in large part from the stop-and-start tariff issues has hurt builder confidence, but the initial trade arrangements with the United Kingdom and China are a welcome development,” said Robert Dietz, chief economist at the National Association of Home Builders (NAHB). 

Dietz added that recent tariff actions have negatively impacted builders, with 78% reporting difficulties in pricing homes due to uncertainty over material costs. 

The HMI survey revealed that 34% of builders cut home prices in May, up from 29% in April and the highest since December 2023’s 36%. The average price reduction remained steady at 5%, with 61% of builders continuing to offer sales incentives, unchanged from April.