According to the National Association of Home Builders, builder sentiment is back up at 70 points in May, 1 point higher than was expected. Experts cite strong demand and low supply as a primary driver for builder confidence.
Custom builder based in LaPlace, La. and NAHB chairman Randy Noel says of the May report, "builders are buoyed by growing consumer demand for single-family homes," yet the view is not totally rosy, he adds, "the record-high cost of lumber is hurting builders' bottom lines, and making it more difficult to produce competitively priced houses for newcomers to the market." CNBC reports that current sales conditions rose two points in May, and buyer traffic and sales expectations were flat.
"Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly built single-family homes," said Robert Dietz, chief economist of the NAHB. "With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead." On a three-month moving average for regional scores, the West and Northeast held unchanged at 76 and 55, respectively. The South and Midwest each fell 1 point to 72 and 65.