US Housing: Sales, Builders and Mortgage Rates — 2026-10-30
US new home sales fell in September as rising mortgage rates overwhelmed builder incentives, while D.R. Horton reported a fourth consecutive year of declining sales orders and lowered its gross margin outlook. Builder confidence has hit its lowest level since 2012, signaling a deepening slump in the housing market despite stable existing-home sales.
US Housing: Sales, Builders and Mortgage Rates — 2026-10-30
Top developments
New Home Sales Decline Amid Rate Surge
Sales of new homes in the US edged lower in September as homebuilders’ efforts to trim prices and offer sales incentives failed to offset a surge in mortgage rates. The decline highlights the immediate impact of borrowing costs on the new construction market, where buyers are more sensitive to monthly payment changes than in the resale market.
D.R. Horton Warns of Continued Mortgage Pressure
D.R. Horton, America’s largest homebuilder, reported fourth-quarter fiscal 2026 net income of $741.8 million on revenue of $9.4 billion, but warned that higher mortgage rates and cautious consumer sentiment weighed on demand. The company guided Q1 fiscal 2027 gross margins down to 18-18.5% and noted a 7% drop in Q4 net sales orders, marking its 25th year as the largest builder by volume but facing significant margin pressure.
Builder Confidence at Lowest Since 2012
Housing has become the weak spot in the otherwise strong US economy, with builder confidence falling to its lowest level since 2012. This pessimism is accompanied by falling housing starts, indicating that builders are pulling back on new projects due to uncertain demand and high financing costs.
Mortgage Rates Remain Near Three-Year Highs
While mortgage rates retreated slightly from their October 5 high, the average 30-year fixed rate stood at 7.32% for the week ending October 22, down from 7.40% the prior week but still 113 basis points above the 6.19% average a year earlier. This resurgence has deepened the prolonged mortgage slump, which is now in its fourth year.
Local view
Affordability Pressure Persists for Buyers
Local market updates indicate that the US housing market is entering the end of October with more homes available for buyers, but mortgage rates near 7% continue to pressure affordability. Sellers are facing increased pressure to price properties competitively as national home prices remain higher than a year ago, but slower sales and rising inventory are shifting some leverage to buyers.
Context & numbers
Forecast for 2026 Home Sales Growth Slashed
Forecasts for US home sales growth in 2026 have been revised downward from 14% to 2% or less, as mortgage rates topping 7% have dampened demand. Analysts cite high inflation leading central banks to raise short-term rates as a primary driver of this slowdown.
Goldman Sachs Outlook for 2027
Goldman Sachs predicts that the rise in mortgage rates this year will likely continue to weigh on home sales, prices, and housing starts in the year ahead. This outlook suggests a prolonged period of subdued activity in the housing sector.
On the radar
- Upcoming Data Release: The National Association of Realtors is scheduled to release October existing-home sales data on Thursday, November 12, 2026, at 10:00 a.m..
- Builder Strategy Shifts: As margin pressures mount, builders like Toll Brothers are out-earning competitors like Lennar by focusing on brand strength and higher gross margins rather than volume, a trend worth monitoring for broader industry implications.
- Mortgage Rate Fluctuations: Mortgage rates have shown volatility, with recent small dips offering temporary relief but not reversing the broader upward trend seen since August.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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