An index of market conditions from the National Association of Home Builders and Wells Fargo ticked up 1 point in November to 38. A value below 50 means more builders see conditions as poor than good. Economists surveyed by Bloomberg estimated sentiment to hold at 37.

In November, 41% of builders reported cutting prices, a record in the post-Covid period, according to Tuesday's report. More broadly, 65% reported using sales incentives, unchanged from the prior two months.

READ MORE: New-home loan growth slows as builders anticipate a slowdown

Despite lower mortgage rates and tamer prices recently, consumers are still worried about the economy and job market. Layoffs are picking up while hiring remains sluggish, and weakness in spending is spreading from lower-income Americans into the middle class.

"We continue to see demand-side weakness as a softening labor market and stretched consumer finances are contributing to a difficult sales environment," NAHB Chief Economist Robert Dietz said in a statement.

Data out earlier Tuesday showed US companies shed 2,500 jobs per week on average in the four weeks ended Nov. 1, according to ADP Research. Job gains were probably tepid in September, ahead of the government's report due Thursday that was delayed by the shutdown.

READ MORE: New-home sales pace hits 2025 high despite dip in apps

Among the index's components, sales expectations in the next six months fell 3 points, while gauges of present sales and prospective buyer traffic each ticked up slightly. The group also said market uncertainty, exacerbated by the record long government shutdown, played a part in restraining sentiment.

Despite the weak sentiment reading, builders are looking toward an improved spring selling season, encouraged by mortgage rates hovering near the lowest level in a year and some improvement in clearing an oversupply of houses, according to recent earnings calls. They're also gaining an affordability advantage over resold homes, and the heavy discounting is likely to continue next year, Bloomberg Intelligence analyst Drew Reading said in an Oct. 29 note.

Around the country, builder sentiment in the South, the US's biggest homebuilding region, as well as the West climbed to the highest since April. Sentiment in the Northeast fell by the most since February, while it was down in the Midwest to a lesser extent.

The National Association of Realtors will give an update on the previously owned home market on Thursday, when it releases October existing-home sales.