Home builders cut prices for newly built homes at a record pace in November in an attempt to jumpstart sluggish market conditions that have continued to weigh on builder sentiment.

The Housing Market Index (HMI), jointly produced by the National Association of Home Builders (NAHB) and Wells Fargo, clocked in at 38 in November, a one-point increase from October.

A component index that tracks builder confidence about current sales conditions for single-family homes rose two points during the month, from 39 to 41, while the index measuring traffic of prospective buyers had a reading of 26, a one-point gain from the prior month.

But single-family sales expectations for the next six months fell three points to 51, which dragged down the overall builder sentiment reading.

“We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment,” NAHB Chief Economist Robert Dietz said in a statement accompanying Tuesday’s data release. “After a decline for single-family housing starts in 2025, NAHB is forecasting a slight gain in 2026 as builders continue to report future sales conditions in marginally positive territory.”

NAHB Chairman Buddy Hughes, a North Carolina-based builder and developer, noted that despite lower mortgage rates over the past month, the 43-day government shutdown and concerns over job security and inflation have created headwinds for prospective buyers.

“More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence,” Hughes observed.

The HMI survey showed that 41% of builders reported price cuts in November. That’s a record high in the post-pandemic era and the first time that metric has crossed the 40% mark.

The average price reduction was 6% in November, the same rate as October. About 65% of builders reported using some form of sales incentive, which was also flat from the prior month.

The overall HMI reading of 38 marks the 19th consecutive month the builder sentiment barometer has been in pessimistic territory. Any result under 50 indicates a general lack of builder confidence.

Regionally, the West’s HMI reading of 33 and the South’s 37 reading each represented two-point gains. But builder sentiment fell by two points in the Midwest, from 42 to 40, and by a whopping 10 points in the Northeast, from 55 to 45.