Builder sentiment levels remained unchanged in September but lower mortgage rates and expectations that the Federal Reserve will soon cut the federal funds rate led to higher future sale expectations. Builder confidence in the market for newly built single-family homes was 32 in September, unchanged from the August reading. While builder sentiment has hovered at a relatively low reading between 32 and 34 since May, builders expressed optimism that a more favorable interest rate climate could bring hesitant buyers off the sidelines in the final quarter of 2025. NAHB expects the Fed to cut the federal funds rate at their meeting this week, which will help lower interest rates for builder and developer loans. Moreover, the 30-year fixed rate mortgage average is down 23 basis points over the past four weeks to 6.35%, per Freddie Mac. This is the lowest level since mid-October of last year and a positive sign for future housing demand.