Confidence among America's homebuilders just dropped to its lowest point in 14 years. According to Business Insider, the National Association of Home Builders' sentiment index fell three points to 29 in October. Anything below 50 means more builders see bad conditions than good ones. The last time it was this low, the market was still recovering from the 2008 crash, and 2026 is on pace to be the worst year for home sales since 2011.

The main problem is that buying a home has gotten even harder to afford. The average 30-year mortgage rate hit 7.4% last week, the highest in three years, and prices are still high in many areas. More buyers are sitting it out or backing out of deals, and cancellations in the West are at their highest since late 2023. Builders are squeezed from the other side too: building-supply prices are up nearly 29% from a year ago, and 43% of builders cut their prices this month, the most since 2020. Over a third also say immigration enforcement has delayed projects or kept workers away.

Don't expect a quick turnaround. Economists at Oxford Economics, Goldman Sachs, and Pantheon all expect sales to stay weak, mostly because mortgage rates look likely to stay high for a while. One Pantheon economist warned that builder confidence could drop even further over the next month or two.