Spring Slowdown: Builders Pull Back as Demand Softens in March
April 21, 2026
According to the latest HomeSphere/BTIG State of the Industry report, builder momentum slowed in March as rising rates, declining traffic, and increased incentives pointed to a more cautious start to the spring selling season.
As the spring selling season begins, builder sentiment took a noticeable step back in March, with softness showing across nearly every key metric. More builders reported year-over-year sales declines, rising to 35% from 23% in February, signaling a reversal from the prior month’s momentum.
Traffic trends also shifted sharply. Only 33% of builders reported higher year-over-year traffic, down from 43% in February, while the share reporting declines nearly doubled. Expectations followed a similar pattern, with fewer builders indicating that sales and traffic outperformed forecasts compared to the previous month.
Pricing conditions weakened modestly, as more builders reported lowering base prices and increasing the use of incentives to support demand. This suggests growing pressure to maintain buyer interest in a more challenging environment.
Builder commentary echoed this shift in tone, turning more cautious in March. Across regions, respondents pointed to geopolitical tensions, rising gas prices, and renewed increases in mortgage rates as key headwinds impacting both traffic and sales.
The takeaway: March marked a broad-based pullback across sales, traffic, pricing, and expectations. After early-year improvement, higher rates and cost pressures — exacerbated by global uncertainty — have begun to weigh on demand once again. With affordability and inventory challenges still in play, builders are approaching the peak spring season with increased caution.
The latest NAHB/Wells Fargo Housing Market Index (released April 15, 2026) decreased to 34.
Highlights from the latest State of the Industry Report
Sales & traffic. Sales declined in March after the February improvement. 35% of builders reported lower sales year-over-year vs. 23% in February, while 34% of respondents reported higher y/y sales growth, up slightly from 32% in February. Traffic trends reversed, with 33% of builders reporting higher year-over-year traffic vs. 43% in February and 36% in March 2025, while 35% reported lower traffic vs. just 18% in the previous month and 24% last March, resulting in a higher-minus-lower spread of -2, down from +25 last month and well below +12 in March 2025.
Sales & traffic relative to expectations. Sales relative to expectations weakened in March, 26% of respondents saw sales as better than expected (33% in February) and 26% saw sales as worse (22% in February), resulting in a better-minus-worse spread of 0, down from +11 in February. 24% of builders saw better-than-expected traffic vs. 40% in February, and 21% saw it as worse vs. 11% in February, producing a better-minus-worse spread of +3 vs. +29 in February.
Base pricing. The percentage of builders raising some, most or all base prices declined slightly to 17% from 19% in February. The combined percentage of builders lowering some, most, or all base prices remained increased to 23% vs. 21% in February.
Incentives. 24% of survey respondents reported increasing some, most, or all incentives in March, up from 18% in February. 6% reported decreasing incentives and 59% left incentives unchanged, consistent with results in February.
Builder commentary. Builder commentary turned more cautious, with macro uncertainty a major factor. The conflict in Iran, re-accelerating mortgage rates, and broader economic concerns were recurring themes, while the use of incentives remained in place to help offset persistent affordability constraints.
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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