In March 2025, the US National Association of Home Builders (NAHB) housing market index dropped to 39, falling short of the expected 42. This matches the lowest level recorded in 2024.
New home sales are at a low, with single-family sales at 43, down from 46 previously. Prospective buyer sentiment has decreased to 24, the lowest since November 2023, while sales expectations rose slightly to 47 from 46.
Regional Housing Market Trends
Regionally, the Northeast is at 47, slightly down from 48, while the Midwest dropped to 38 from 43. The South decreased to 39 from 42, and the West is at 34, down from 35.
The most recent housing market index from the NAHB came in below expectations, falling to 39 in March. This marks a return to the weakest level seen last year, underscoring continued struggles within home construction. A deeper look at the numbers offers little encouragement. Sales of newly built homes have slowed further, particularly in the single-family segment, where the index now sits at 43, slipping from the prior reading of 46.
Waning interest from prospective buyers highlights ongoing hesitancy. Their sentiment has dropped to 24—an eight-month low—which suggests fewer households are actively considering purchases. However, homebuilders anticipate slightly better conditions ahead, with their short-term sales outlook edging up to 47 from 46. While still below neutral levels, this increase hints at some measured optimism.
Breaking it down by region, declines were observed across all areas. The Northeast saw only a marginal dip, moving from 48 to 47. The Midwest, however, saw more pronounced weakness, down to 38 from 43. In the South, which remains a key driver of overall housing demand, figures have dropped from 42 to 39. Meanwhile, the West—already at the lower end—saw another slight reduction, reaching 34 from 35.
Interpreting The Market Outlook
What does all of this mean? A reading below 50 signals that more builders view conditions as poor rather than good. With the index now hovering at levels last seen when borrowing costs were at their peak in 2024, the outlook for near-term construction activity appears muted. A growing number of builders are seeing fewer buyers and weaker overall demand, which may restrict supply-side activity unless affordability challenges ease.
For those closely watching these developments, it is worth paying particular attention to shifts in buyer enthusiasm and regional dynamics. The Midwest’s larger-than-expected drop suggests weakening demand in an area that had previously remained relatively resilient. The South, typically one of the stronger-performing regions, is also experiencing setbacks, raising questions about broader market health.
Looking ahead, builders’ sales outlook has improved—though only slightly. That alone won’t be enough to drive momentum, especially with affordability concerns persisting. Monitoring both mortgage rates and economic sentiment over the next few weeks will be essential, particularly if prospective buyers continue to retreat.
