Sales and Traffic Weaken as Pricing and Incentives Remain Stable
January 22, 2026
December’s HomeSphere/BTIG State of the Industry Survey showed that sales and traffic trends remained subdued in a seasonally slow market.
December trends weakened versus November. More builders reported lower year-over-year order growth and declining traffic, though small gains were seen in builders reporting higher orders and traffic. Year-over-year, 38% of builders reported lower order growth compared with 33% in November, while 24% saw higher orders, up slightly from 23% the prior month. Traffic trends were weaker, with 39% of builders reporting lower year-over-year traffic versus 30% in November, though 26% saw an increase compared with 23% previously.
Sales and traffic relative to expectations remained generally flat. While fewer builders reported sales as worse than expected, traffic expectations deteriorated slightly, leaving both measures in negative territory overall. 18% of respondents seeing sales better than expected (up from 17% in November) and 29% worse than expected (down from 34%). For traffic, 18% of builders reported better-than-expected results and 28% worse.
Base pricing was mostly stable, with 46% keeping prices unchanged (up from 33%) and 15% raising prices (down from 18%), while slightly more builders reduced prices. Incentives were relatively steady, with 28% increasing incentives (down from 32%), 8% decreasing them (up from 5%), and 53% keeping them unchanged (up from 44%).
Builder commentary was more varied than in November, with some expressing optimism for 2026 if mortgage rates decline, though most continued to highlight challenges from elevated prices and mortgage rates. Overall, the results reflect a market still constrained by affordability, consumer sentiment, and higher inventory levels, suggesting that these headwinds are likely to persist into 2026.
The latest NAHB/Wells Fargo Housing Market Index (released January 16, 2026) fell two points to 37.
Highlights from the latest State of the Industry Report
Sales & traffic. Builders reported lower sales and traffic trends relative to November. 38% of respondents reported lower y/y order growth vs. 33% in November, and 24% saw a y/y increase in orders in December, up 1% monthly. 39% of builders reported a decrease in y/y traffic vs. 30% last month while 26% saw an increase vs. 23% last month.
Sales & traffic relative to expectations. Business relative to expectations remained flat in December compared to November. 18% of respondents saw sales as better than expected (17% in November), and 29% saw sales as worse than expected vs. 34% last month, resulting in an improvement in the better-minus-worse spread to -11 from -17. For traffic, 18% of builders saw it as better than expected, and 28% saw traffic as worse than expected (a better-minus-worse spread of -10). This compares to 19% better and 24% worse last month (a spread of -5).
Base pricing. The percent of builders who decreased base prices in December compared to November was slightly higher, while the percentage of builders that kept base pricing unchanged increased to 46% from 33% in November. 15% of builders raised some, most, or all base prices, vs 18% in November.
Incentives. The percentage of builders who increased most/all or some incentives decreased to 28% in December from 32% in November, but remains higher y/y vs 27% in December 2024. The percentage of builders who decreased most/all or some incentives increased to 8% (5% in November), while 53% of builders kept incentives unchanged vs. 44% in November.
Builder commentary. Commentary was more varied than last month, with builders expressing optimism for 2026 and some reporting better-than-expected demand. Most builders, though, continued to highlight challenging conditions driven by both elevated prices and mortgage rates.
HomeSphere/BTIG State of the Industry Report
HomeSphere partners with the global investment bank BTIG to create a monthly report to provide our builders and manufacturers with exclusive and timely insights about the market.
To compile the report, we survey HomeSphere’s 2,700+ regional and local home builders about sales, traffic, pricing, labor costs and other key industry metrics.
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