Spring Momentum Builds, But Builder Sales Face February Reality Check
March 24, 2026
The February 2026 HomeSphere/BTIG State of the Industry Report homebuyer interest is climbing as spring approaches, but sales growth is tempered by affordability challenges and the ongoing need for incentives.
After a strong start to the year, home builders experienced a modest cooling in sales momentum in February, even as buyer interest continued to build. While 32% of builders reported year-over-year sales growth — down from 39% in January — the share reporting declines rose to 23%, signaling a more mixed demand environment.
Encouragingly, traffic trends remained a bright spot. Builder foot traffic reached its highest level in the past year, with 43% reporting increased activity compared to 38% the previous month. Additionally, more builders noted traffic exceeding expectations, suggesting growing consumer interest as the spring selling season approaches.
Despite stronger traffic, converting interest into sales continues to be a challenge. Pricing remained largely stable, though more builders reported selective price reductions, and incentives held steady month-over-month. Affordability pressures, margin compression, and the need for incentives remain key hurdles.
Builder sentiment reflects a mixed landscape. Some markets faced weather-related disruptions, while others are beginning to see early signs of seasonal demand and pent-up buyer interest.
Bottom line: Rising traffic is an encouraging indicator heading into spring, but affordability constraints and elevated inventory levels are tempering the pace of sales growth, making it harder for builders to fully capitalize on increased demand.
The latest NAHB/Wells Fargo Housing Market Index (released March 16, 2026) increased to 38.
Highlights from the latest State of the Industry Report
Sales & traffic. Sales moderated after the January improvement. 32% of respondents reported y/y sales growth in February, down from 39% in January, while 23% saw sales fall year-over-year, up from 16% in January. Traffic trends continued to accelerate, with 43% of builders reporting higher year-over-year traffic vs. 38% in January and 37% in February 2025, while just 18% reported lower traffic vs. 19% in the previous month and 24% last February, resulting in a higher-minus-lower spread of +25, up from +19 last month and well above +13 in February 2025.
Sales & traffic relative to expectations. Sales relative to expectations were in-line m/m, while traffic improved. 33% of respondents saw sales as better than expected (34% in January) and 22% saw sales as worse (17% in January), resulting in a better minus-worse spread of +11, down modestly from +17 in January. 40% of builders saw better than expected traffic vs. 35% in January, and 11% saw it as worse vs. 16% last month, producing a better-minus-worse spread of +29 vs. +19 in January.
Base pricing. The percentage of builders raising some, most or all base prices was roughly flat at 19% vs. 20% in January. However, more builders reduced prices in February, with a combined 14% lowering some, most, or all base prices compared to 8% in January.
Incentives. 18% of survey respondents reported increasing some, most, or all incentives in February, down from 24% in January. 5% reported decreasing incentives and 59% left incentives unchanged, consistent with results in January.
Builder commentary. Overall comments were mixed with typical seasonality playing a role. Weather disruptions were a recurring theme. Incentives and price cuts remain important tools to spur 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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