Builder Confidence Edges Up to 38 in March as Housing Starts Rise 7.2% to 1.49M Rate

The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 38 in March 2026, snapping a two-month streak at 37 and offering a tentative sign that builder sentiment is stabilizing after sustained pressure from elevated construction costs, rate uncertainty, and tariff-driven material cost increases. Current sales conditions improved one point to 42, while the six-month sales expectations component gained two points to 49 — the first time that forward-looking measure has been above 48 since October 2025.

The housing starts data released March 12 provided additional encouragement. Privately-owned housing starts registered at a seasonally adjusted annual rate of 1,487,000 — up 7.2% from the revised December 2025 figure and 9.5% above January 2025 levels. Single-family starts were the primary driver, rising 8.1% to an annual rate of 1,031,000. Multifamily starts also increased, though the apartment sector remains constrained by elevated vacancy in some markets and tight construction financing.

Building permits told a more cautious story. Permits came in at a seasonally adjusted annual rate of 1,376,000 — down 5.4% from December and 5.8% below January 2025 levels. The divergence between starts and permits reflects builders moving forward on already-permitted projects while pulling back on new permit applications amid uncertainty about tariff costs on lumber, steel, and other imported materials.

Builder price adjustments remain widespread. Thirty-seven percent of builders reported cutting prices in March — up slightly from 36% in February — with the average reduction holding steady at 6%. The majority of builders continued offering incentives such as mortgage rate buydowns, waived lot premiums, or appliance packages to close sales. The persistence of incentives suggests affordability constraints are keeping many potential buyers on the sidelines.

J.P. Morgan Global Research's updated U.S. housing market outlook projects home prices will be essentially flat in 2026, with a 0% national appreciation forecast reflecting the offsetting pressures of improved demand and increased supply. The bank's analysts note that price stagnation, while disappointing for sellers who purchased at peak values, is actually a positive development for long-term market health.