January Builder Sentiment Turns More Positive
February 24, 2026
The January 2026 HomeSphere/BTIG State of the Industry Report shows a meaningful improvement in demand trends compared to December.
Builders reported noticeably stronger year-over-year performance to begin the year. In January, 39% of respondents saw higher year-over-year order growth, up from 24% in December and marking the strongest result since March 2024. At the same time, just 16% reported lower year-over-year sales, a sharp improvement from 38% the prior month. Traffic trends also strengthened, with 38% of builders reporting higher year-over-year traffic compared to 26% in December, signaling renewed buyer engagement as the year gets underway.
Business performance relative to expectations improved significantly as well. In January, 34% of builders said sales were better than expected, compared to just 18% in December. Meanwhile, 17% reported worse-than-expected sales, down from 29% the previous month. This shift represents a clear turn in momentum heading into 2026.
Pricing activity picked up modestly, with 20% of builders raising base prices to some degree, up from 15% in December. At the same time, incentive trends continued to flatten. A majority of builders reported keeping incentives unchanged in January, compared to 53% in December and 44% in November. This stabilization suggests that some builders may be regaining confidence in demand and relying less heavily on aggressive incentives to drive sales.
Overall builder commentary was more optimistic than in December. Several respondents noted improved traffic and momentum heading into the spring selling season, although some continue to cite weather-related slowdowns and ongoing affordability challenges.
The latest NAHB/Wells Fargo Housing Market Index (released January 16, 2026) fell one point to 36.
Highlights from the latest State of the Industry Report
Sales & traffic. Builders reported better year-over-year sales and traffic trends relative to December. 39% of respondents reported higher year-over-year order growth, while 16% saw lower year-over-year sales compared to 38% in December. Traffic trends similarly improved, with 38% of builders reporting higher year-over-year traffic vs. 26% in December, while 19% saw a decrease vs. 39% last month.
Sales & traffic relative to expectations. Business relative to expectations also improved in January compared to December. 34% of respondents saw sales as better than expected (18% in December), and 17% saw sales as worse than expected vs. 29% last month, resulting in an improvement in the better-minus worse spread to +17 from -11. For traffic, 35% of builders saw it as better than expected, and 16% saw it as worse than expected (a better-minus-worse spread of +19). This compares to 18% better and 28% worse last month (a spread of -10).
Base pricing. The percent of builders who decreased base prices in January fell by 6%, while the percentage of builders that kept base pricing unchanged remained relatively flat. 38% of builders raised some, most, or all base prices, vs. 31% in December.
Incentives. The percentage of builders who increased most/all or some incentives decreased to 24% in January from 28% in December, and is a year-over-year reduction vs. 30% in January 2025. The percentage of builders who decreased most/all or some incentives fell to 5% (8% in December), while 59% of builders kept incentives unchanged vs. 53% in December.
Builder commentary. Commentary remains mixed but on balance more optimistic relative to December, with some builders noting improved activity to start the year, while others continue to cite affordability challenges, weather-related slowness, and the continued use of incentives to drive sales.
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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