But incentives and price cuts are not helping buyer traffic.
The Freddie Mac average 30-year mortgage rate peaked at 7.62 percent in October of 2023. The NAHB traffic index was 26.
The traffic index is now 25 despite builder incentives and a 1.32 percentage point drop in mortgage rates.
NAHB Wells Fargo Housing Market Index
Please consider the NAHB/Wells Fargo Housing Market Index (HMI) for October 2025.
Each month, the HMI depicts overall builder sentiment toward housing market conditions on a scale ranging between 0 and 100. A higher reading (>50) is an indication that the majority of builders feel confident about the current and near-term outlook for housing. Lower readings signify less optimism among builders.
HMI Key Findings: October 2025
- Current sales conditions increased four points to 38.
- Sales expectations in the next six months jumped nine points to 54.
- Traffic of prospective buyers posted a four-point gain to 25.
Incentives
- 38% of builders reported cutting prices in October. This share has alternated between 37% and 39% since June.
- The average price reduction rose to 6% in October after averaging 5% for several months previously. The last time builders reduced prices by 6% was a year ago in October 2024.
- The use of sales incentives was 65% in October, unchanged from September.
Builders are more optimistic as the expectations index jumped 9 points to 54. I suspect falling mortgage rates are in play. But traffic is still dismal and present conditions are near the bottom of the recent range.
Related Posts
August 23, 2025: It’s Now Twice as Expensive to Buy an Entry-Level Home than Rent
Thinking of buying a starter home? Be careful!
September 7, 2025: Price of Home Lot Sets to Decline, Market Is Cooling Fast
“The land market is cooling fast,” says John Burns Consulting.
Powell Admits Prior Monetary Framework Was Hugely Flawed
At the annual Jackson Hole meeting this year Powell Admits Prior Monetary Framework Was Hugely Flawed
The Fed just announced a new monetary framework. Is it any better?
The short answer is the new framework is nearly as flawed as before, and the Fed still holds many disproved economic theories.
The Fed helped destroy the housing market. See above for details.
From October 2022 low to January 2025 high, the Housing index traced out an Elliott wave triangle. The housing market bear market has one more down leg to go. Don’t count on things to get better in 2026 even if mortgage rates fall below 6%.
well, everyone’s waiting for rates to drop. why woul dyou buy now unless you absolutely had to?
Feels like we’ve been here before…maybe 2007.
Bad loans by regional banks should concern us all
https://www.cnbc.com/2025/10/17/bad-loans-by-regional-banks-should-concern-us-all.html
Concerns About Bad Loans Rocked Bank Stocks on Thursday—How Many More ‘Cockroaches’ Are Out There?
https://finance.yahoo.com/news/concerns-bad-loans-rocked-bank-214027614.html
Let’s transpose that 38%, and then we’ll be making progress.
“One in every 1,402 housing units nationwide saw a foreclosure filing in Q3″
That makes me chuckle. The peak foreclosure rate during the GR was 2.23%, so 1/1,402 or .0071% is NOTHING. It’s not even worth reporting.
Reduce the denominator by at least half, and then maybe it’ll be worth paying attention to.
The majority of the homes were built in locations that relied on “Remote Work”. Now that remote work has ended at most corporations, the builders are screwed.
Dumb move by the builders.
Home demand is only strong in job rich cities.
Everyone may be priced out of housing eventually even those with paid off homes as insurance, property taxes and (next) utilities take their toll on cash flow. Food prices aren’t helping either. Wife was complaining about $200 for a bag worth of groceries and she’s richer than I am.
When does the golden age begin?
I came across this interesting article yesterday:
When Do We Truly Own Anything? The Property Tax Scheme That Keeps Us Paying Forever
Property tax is marketed as a way to fund communities, but in reality, it is a perpetual lease from the state.
Mollie Engelhart
10/13/2025|
Commentary
Texas is famous for its wide-open land, its independence, and its promise of freedom. Yet the truth is that Texans pay some of the highest property tax rates in the country. The state itself doesn’t collect property tax, but local governments make up for it many times over. Even with agricultural and wildlife exemptions, the real burden still falls on commercial buildings, apartment complexes, and single-family homes—the very places where most people live and work.
Every year, I write a check for twenty-four thousand dollars in property taxes. In Texas, over half of that typically goes toward public education—sometimes up to 70 percent in certain counties. The irony is that none of it goes toward educating my own children.
I homeschool my kids. On our farm, we built a small barn with electricity, air conditioning, and a nearby restroom. My husband and I teach our children farming, entrepreneurship, and money management. We hire a teacher three days a week for reading, writing, and math, and a tutor for additional help with reading. We pay entirely out of pocket for all of it. Yet each year, I’m still forced to pay tens of thousands of dollars to fund a system I fundamentally disagree with.
I don’t believe the public school system nurtures creativity, curiosity, or courage. It creates workers, not thinkers. It rewards compliance, not conviction. I often joke that I don’t co-parent with the government, but in truth, the property tax system makes me do exactly that. It forces me to contribute to a system that, in my view, often indoctrinates children rather than inspiring them. It feeds them food I consider unhealthy and trains them to fit in rather than think for themselves.
Last year alone, my property tax bill increased by eleven thousand dollars. I paid extra to bring electricity and internet to our rural property. I maintain the land, the buildings, and the utilities myself. Yet every year, I have to pay again just for the right to keep what I already own. Even if I pay off my mortgage, I will still have to pay property taxes. That means I never truly own my home. The government can raise taxes whenever it wants, and if I can’t pay, it can take the property away. How is that ownership? How is that freedom?
…
https://www.theepochtimes.com/opinion/when-do-we-truly-own-anything-the-property-tax-scheme-that-keeps-us-paying-forever-5925351
Texas is full of people who hate income taxation, so they gifted to themselves – as in, invited the state to punch them in the face – property taxation. I find it hilarious. The legislature has made the possibility of switching to income taxation a virtual impossibility. There are bills introduced each year at the state legislature to end the taxation of property in Texas. I’m all for that as this state fully deserves to kick the holy chit out of its stupid self.
Also, you pay property taxes forever because a cop gets a salary each year, and not for one year and then works for free for the rest of his life. Freedom is not free.
I often disagree with you on the margins but I cannot for the life of me see how there are down votes to this factual post. It’s all about affordability and the relentless nature of the massive undercounted inflation. It’s really all about them damn turtles of yours!
If your price cuts aren’t generating more traffic, then you didn’t cut them enough. Home builders are doing everything they can think of to maintain the prices and margins they had when interest rates dropped to 2%. They can’t and apparently they aren’t bright enough to see reality.
Interest rate buydowns cost less than price reductions – if the payment is all that matters to a buyer (who doesn’t realize they’re overpaying for the house).
# gold 4300
just couple weeks ago it was 4000! no correction on horizon so far!
happy weekend, gold-bugs
If gold becomes a “strategic” asset, trump will just nationalize and seize it. I expect trump to take “ownership” stakes in gold miners soon enough given his track record.
But yeah, enjoy the profits while you can…I know I am.
aint gonna happen!
1st of all -most gold in private hands , not in ownership of miners.
2d = USA is not biggest producer (China, Russia, down-under, Canada are)
overall you have mild form of TDS!
The govt trying to seize your gold is a non starter, if you hold it personally. Some sheep will willingly give it up like they would with guns also. Paper gold like etf’s maybe. Intersting fact; gold would have to reach $22,000 once if it was to cover all money in circulation. Interesting thought. It has happened before, ie gold priced to cover the monetary base.
Up till now, this sort of rally got aborted in the futures market. Did the shorts know this time was different and cover, or did retail and others over-power the manipulation? Any big risk-off event will bring gold down with it, that much won’t have changed.
And I would add, let it run and never sell before the trend reversal.
I’ve read rumor that Judy Shelton has proposed to the Trump Administration that 50-yr and 100-yr Treasuries be issued to be backed by gold….commencing on July 4th, 2026, the 250th anniversary of USA independence. Just a rumor, but maybe it gets traction going forward?