May Home Builder Survey: Sales Stabilize, but Traffic Weakens
June 23, 2026
The latest HomeSphere/BTIG State of the Industry Builder survey, which gathered responses from small- and mid-sized tract and custom builders nationwide, suggests that the housing market remained relatively stable in May after two months of weakening conditions. However, softer traffic trends and increased use of incentives indicate that affordability pressures continue to weigh on consumer demand.
Builder sales activity improved modestly in May. Twenty-eight percent of respondents reported higher year-over-year sales, up from 24% in April, while the percentage reporting lower sales declined to 27% from 32% the previous month. While sales held relatively steady, much of the support appears to have come from pricing adjustments and increased incentives rather than stronger buyer demand.
Traffic remained a notable area of weakness. Only 20% of builders reported higher year-over-year traffic in May — the lowest level since November 2023. Builders reporting stronger traffic have steadily declined since February, suggesting that higher mortgage rates, persistent inflation, and weaker consumer sentiment are causing prospective buyers to delay purchasing decisions.
Sales and traffic performance relative to builders' expectations changed little from April. Builder commentary continued to reflect a subdued outlook, with many respondents describing the spring selling season as slower than anticipated. The survey results also continue to diverge from commentary provided by larger public builders, which has generally been more optimistic. This difference may indicate that smaller and mid-sized builders are experiencing a more challenging market environment.
To help stimulate demand, builders increasingly turned to incentives and pricing adjustments in April. Twenty-four percent of builders reported lowering some, most, or all base prices, and 28% increased the use of incentives, up from 24% in March.
These measures highlight the competitive environment builders are navigating as they work to convert traffic into signed contracts.
Compared with April, more builders reported lowering prices and increasing incentives. These actions appear to have helped support sales despite softer traffic, but they may also be putting pressure on profitability. As affordability concerns persist, builders continue to balance maintaining sales volume with protecting margins.
May's survey results point to a market that remains under pressure from elevated mortgage rates, inflation, and weaker consumer sentiment. While sales stabilized, traffic trends weakened further, and builders increasingly relied on incentives and pricing actions to generate demand. Going forward, buyer traffic will be an important metric to watch. If traffic continues to soften, builders may face additional pressure on both sales volumes and margins during the second half of the year.
The latest NAHB/Wells Fargo Housing Market Index (released June 15, 2026) decreased two points to 35.
Highlights from the latest State of the Industry Report
To maintain sales activity, builders relied more heavily on price reductions and buyer incentives in May.
Sales & traffic. Sales looked moderately better in May after March and April declines. 28% of respondents reported higher y/y sales in May vs. 24% in April and 27% of respondents reported lower y/y sales vs. 32% in April. Traffic trends were mixed. 25% of respondents reported lower y/y traffic, an improvement from 29% in April, but 20% reported higher traffic, down from 29% in April and a recent high of 43% in February.
Sales & traffic relative to expectations. Sales and traffic relative to expectations were relatively flat in May. 30% of respondents saw sales as better than expected (27% in April) and 37% saw sales as worse (35% in April). 28% of builders saw better than-expected traffic, flat from April, and 24% saw it as worse vs. 26% in April.
Base Pricing. The percentage of builders raising some, most or all base prices declined to 17% from 20% in April. The percentage of builders lowering some, most, or all base prices increased to 27% vs. 24% in April.
Incentives. 29% of survey respondents reported increasing some, most, or all incentives in May, up from 28% in April. 3% reported decreasing incentives and 56% left incentives unchanged.
Builder commentary. Most builders highlighted a weak selling season impacted by high prices and interest rates. Some builders noted higher incentives successfully spurred sales activity. A few builders pointed to an uptick in demand.
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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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