Homebuilder sentiment rises modestly as affordability pressures persist

Homebuilder sentiment improved in May, but not enough to signal a clean rebound for the people who sell to builders, remodelers and contractors every day at Home Depot. The National Association of Home Builders and Wells Fargo index rose 3 points to 37 from 34 in April, beating expectations for no change but still leaving confidence below the breakeven level of 50 for the 25th straight month.

The details behind the headline mattered just as much as the number. All three components of the index moved higher by 3 points: current sales conditions reached 40, sales expectations for the next six months climbed to 45, and traffic of prospective buyers rose to 25. Even with that improvement, builders were still leaning on price to keep business moving. The share of builders cutting prices fell to 32% in May from 36% in April, but the average discount widened to 6% from 5%.

For Home Depot associates, that mix points to a market that is still working through pressure rather than breaking out. Builders are facing higher mortgage rates, rising gas prices and economic uncertainty tied to the war in Iran, along with elevated land, labor and construction costs. Bill Owens, the NAHB chairman and a home builder and remodeler from Worthington, Ohio, described the market as soft. In stores, that softness usually shows up as uneven project flow, especially in pro-heavy departments where orders can swing with a builder’s financing, backlog and jobsite timing.

That means lumber, millwork, flooring and bath may still see pockets of steady demand, but not the kind of broad lift that turns every aisle into a rush. Pro customers tend to buy selectively when they need certainty on inventory, delivery and substitutions, and they negotiate hard when the market is strained. Store managers and department leads should read the data as a warning against assuming a modest uptick in sentiment will automatically translate into stronger foot traffic or bigger tickets. The more likely pattern is a repair-and-remodel market with isolated opportunities in new construction, not an across-the-board surge.

The regional split also underscored how uneven the housing picture remains. Three-month moving averages put the Midwest at 43 and the Northeast at 42, while the South held at 35 and the West slipped to 28. CNBC noted that May’s gain followed a sharp drop in April and matched the 34 reading from May 2025, when mortgage rates were near 7%. For Home Depot workers, that is the larger lesson: the housing slump has not disappeared, and the store floor will keep feeling it in fitful, category-by-category demand.