The Short Version
- The Fed hiked 25bp to 3.75–4.00%, 12–0, and its own dot plot points at one more this year.
- The 30-year mortgage jumped 19 basis points in a week, to 6.95%.
- Builder confidence fell three points to 32 in the Sept 16 print, its lowest in a year; 38% are cutting prices.
- Single-family starts rose 7.6% to 918,000 anyway — though production is still down 4.7% year to date.
- The feature: the custom premium per square foot hit 12.6%, the widest since 2011 — and in four divisions it runs the other way.
By the Numbers
30-Yr Fixed
6.95%
▲ 0.19 W/W · Sept 17
Fed Funds
3.75–4.00%
▲ 25bps · Sept 16
NAHB HMI
32
▼ 3 M/M · Sept 16 print
SF Starts
918,000
▲ 7.6% M/M · August
This Week's Feature
The Custom Premium Is the Widest Since 2011
NAHB has measured the widest gap between custom and spec construction prices since 2011. Custom homes started in 2025 ran a median $171 per square foot of contract price; homes built for sale ran $152 with the lot excluded — a 12.6% premium, against a two-decade average near 9% (NAHB on Census data, 14 September 2026).
The tempting read is that custom builders finally have pricing power. But a premium is one of two things, and they behave nothing alike. Pricing power means the client pays more for the same work and the difference stays with you. A pass-through means your costs rose, the price followed, and the difference leaves for your supplier. From outside they look identical — the invoice is bigger either way.
Which of the two you are charging is a question every owner who builds to order faces. A fabricator quoting a short run, a service company charging for a same-day call — same question, thinner data. Construction publishes its numbers, so it is the worked example here.
And the premium is not national. In four of the nine census divisions, it does not exist at all.
Keep reading (8 min)Voice of the Builder
The cost of money moved three times in 48 hours.
The Fed raised the funds rate 25 basis points to 3.75–4.00% against inflation at a 3.4% annual rate (NAHB on the FOMC, Sept 16). A dot plot median of 4.1% at the end of 2026 implies one more hike this year, NAHB reads — and a funds-rate rise "does increase the cost of financing for builder acquisition, development and construction (AD&C) loans."
The next morning Freddie Mac printed the 30-year at 6.95%, against 6.26% a year ago (PMMS, Sept 17). Builder confidence, in a reading published Sept 16, fell three points to 32, its lowest since September 2025: 38% cut prices, by an average of 6% for a sixth straight month, and 66% used incentives.
What it means on your jobsite
Two prices to re-check, and both are yours. Run the interest-carry line on anything you finance into next year at the Fed's own dot plot — 4.1%, not today's rate. Then sit with the 66% on incentives: hold list while your comp set buys the rate down and the number a buyer compares you against is not the one on your sign.
- Lennar's CEO said conditions "deteriorated," then cut the year. Q3 orders fell 9% to 20,879, gross margin to 15.8% from 17.5%, and full-year guidance to 80,000–81,000 homes from 82,000–83,000. Stuart Miller: the 30-year rate sat at "approximately 6.8% at quarter end and even higher since." Lennar, Sept 16
- The rebound was single-family only. In the August starts report, multifamily starts fell 21.7% from July and 14.6% from August 2025, to 357,000 SAAR — enough to pull total housing starts down 2.6% to 1.28 million in a month single-family rose. NAHB on Census/HUD
- Women hit a 20-year high in construction, and 4% of the trades. 1.37 million women worked in construction in 2025, 11.3% of employment and the highest since 2004 — but 78% of them sit in office and admin roles against 4% in construction and extraction. NAHB on CPS
Bright Spots
- Single-family starts rebounded in the week everything got dearer. 918,000 SAAR in August, +7.6% on the month and +5.2% on last August; permits ran 878,000, +1.3% Y/Y. NAHB on Census/HUD
- Lennar is building faster than it ever has, and cheaper than last year. Cycle time hit a record 116 days, from 121 last quarter and 126 a year ago, with construction cost per square foot down 6% on the year, 14% against its Q4 2023 baseline. Lennar
- Your remodeling client's equity grew again in Q2. Household real estate assets reached $49.8 trillion, +2.3% on the quarter, and the equity share of them hit 71.9% — above 70% for a thirteenth straight quarter. NAHB on the Fed's Z.1
Then again: One good month of starts is not a pipeline: single-family production is still down 4.7% year to date. Completions ran 816,000, down 22.9% on the year and homes under construction 589,000, down 3.4% — work in progress thinning while the headline improves. Staff against the backlog you can count, not the annualized rate. NAHB
Hot Markets
| Region / state | Permits, YTD through July | Why it matters |
|---|---|---|
| Northeast, multifamily | +39.9% | Largest regional gain in either product type |
| California, multifamily | +25.9% | Second-largest MF state by volume; Texas fell 20.5%, Florida 31.2% |
| Midwest, single-family | +1.1% | The only region where single-family permits rose at all |
NAHB's read of the Census permits survey, published Sept 15, covers January–July against the same months of 2025: single-family permits 546,826, down 3.3%, multifamily 304,876, up 6.3%.
Cooling: Nevada, −27.5% on single-family permits year to date through July, the steepest fall in the country, multifamily worse at −42.0% (3,916 units to 2,271). A permit is work your crews start two quarters from now. If Nevada is on your board, size overhead against the smaller book before the gap lands, not after.
Design Trends · Remodeling
61% of homeowners plan to stay eleven years or more after a renovation, and 44% call the place a forever home.
Kitchen & Bath Business's write-up of Houzz's fall trends, published Sept 14, takes both figures from the 2026 U.S. Houzz & Home Study — the same annual study issue 04 used for planning timelines, published April 23, 2026, fielded January–March 2026 among Houzz's own registered users, covering renovations completed in 2025. The rest of that report is qualitative and stays out. From the study, unused until now: median renovation spend held at $20,000 in 2025, against the $15,000 homeowners intend to spend in 2026.
How to sell it
A client who plans to be there in eleven years is not buying resale value, so stop selling it to them. Draw the aging-in-place work while the walls are open — blocking for grab bars, a zero-threshold shower, a 36-inch door into one main-floor bath — and price it inside this job, not the next one. Against a $20,000 median, blocking is a rounding error. Opening the same wall twice is not.
AI on the Jobsite
Your job posting is screening out people who can do the work
326,000 construction positions stood open in July, from 298,000 in June (NAHB on JOLTS, published Sept 1), and this week's HMI quotes builders on immigration enforcement "discouraging legal workers from reporting to job sites." The posting you still run was written for the market you hired in two years ago.
Copy this prompt
Attached: the job posting I run for [ROLE], and a plain description of what that person actually does in a week — tasks, tools, who they talk to. Return four lists. (1) Every requirement in the posting that nothing in the work description requires, quoting the line. (2) Every requirement written as years of experience where the description names a skill — rewrite it as the skill. (3) Every credential we could teach on our own jobs in under 90 days. (4) Every task in the description the posting never mentions. Then rewrite the posting to what the work requires. Add nothing that is not in my description, and do not soften a safety or licensing requirement — flag anything you are unsure is legally required rather than dropping it.
Time saved: Houzz's survey of 601 U.S. construction and design businesses, fielded June–July 2026 and published by Kitchen & Bath Business Sept 2, puts construction firms using AI at 4.7 hrs/week saved. Self-selected from Houzz's own users, Houzz sells AI tools, and on the same page concern over reliability rose 33% to 37%.
JobTread Tip of the Week
Retainage is money you have already earned and are not holding correctly
With money dearer three ways this week, the cheapest financing you have is the cash already inside your own contracts. JobTread's Sept 15 training sets retainage on customer invoices and vendor bills both:
- Navigate to Settings and toggle on Retainage in the General tab.
- Set your default percentage, cost code, and cost type.
- Adjust retainage per job, or override the settings on individual invoices or bills.
- Use the Retained Cost and Retained Price columns in the budget to see which items have retainage applied.
The Punch List
- New Residential Construction, August — NAHB, Sept 17
- NAHB/Wells Fargo HMI, September — NAHB, Sept 16
- FOMC raises rates 25bp — NAHB, Sept 16
- Q3 2026 results — Lennar, Sept 16
- Single-family permitting through July — NAHB, Sept 15
- Custom home premium — NAHB, Sept 14
Quitting Time
I asked the electrician if they were free Friday.
They said no — they're on a tight circuit.