Mortgage rates have not been below 6 percent in more than three years and have ticked up roughly 50 basis points this year. Demand has flagged along with these increases, and homebuilder confidence is following. In June, Avila Real Estate Capital and Builder Advisor Group surveyed 127 senior homebuilding executives across the country, marking the second edition of a study first fielded in January. Sentiment cooled broadly between the two rounds. What did not cool is access to capital. Builders described financing as about as available as it was a year ago. When builders slow down, the usual assumption is that credit tightened. However, in this cycle, weaker buyer demand is driving a slower pace of housing development.
Sentiment has cooled since January
In January, 45 percent of executives expected 2026 to be stronger than 2025, and 12 percent expected it to be weaker. By June, those numbers had nearly inverted: 24 percent stronger, 38 percent weaker. C
