Low Mortgage Rates Fuel March Home Builder Optimism

Home builder sentiment inched up in March after one metric of mortgage rates dipped to its lowest level since August 2022, the National Association of Home Builders (NAHB) said Monday (March 16).

The NAHB/Wells Fargo Housing Market Index (HMI) rose by one point to 38 in March, the organization said in a press release.

At the same time, builders continued to express concerns about affordability, pointing to elevated construction costs and shortages of buildable lots and labor, according to the release.

“Builders are facing elevated land, labor and construction costs and nearly two-thirds continue to offer sales incentives in a bid to firm up the market,” NAHB Chairman Bill Owens said in the release.

The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months. A number under 50 indicates that more builders view conditions as poor than good, according to the release.

During March, all three of the major HMI indices improved, with current sales conditions up one point, future sales up two points and traffic of prospective buyers up three points, per the release.

All responses to the March survey were received after the conflict with Iran began, according to the release.

Uncertainty around the war in Iran and the price of oil will be headwinds moving forward, NAHB Chief Economist Robert Dietz said in the release. On the other hand, the Freddie Mac 30-year fixed rate mortgage was the lowest since August 2022, as it was gauged at 6.05% in February, Dietz said.

“The administration’s executive orders issued last week to reduce regulatory burdens associated with home building are a positive step toward increasing attainable housing supply,” Dietz said.

The White House announced Friday (March 13) that President Donald Trump signed executive orders to eliminate unnecessary regulatory burdens that delay housing construction and increase housing costs and to reduce regulatory burdens that have driven up mortgage costs.

PYMNTS Intelligence reported in July 2025 that 14% of consumers living paycheck to paycheck, or more than 24 million Americans, cited homeownership as the reason they are stretched thin.

For many Americans, the path to owning a home has become a trade-off between equity and liquidity, and that trend has been accelerated by rising prices, adjustable-rate mortgages and stagnant wages, PYMNTS Intelligence said in the report “The Adjustable-Rate Reckoning: How Homeownership Is Pushing Millions Paycheck to Paycheck.”