Builder confidence in the market for newly built, single-family homes in May fell one point to 45 from a downwardly revised April reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
"After four months in which the HMI has shown little signs of fluctuation, it is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery," said NAHB chairman Kevin Kelly, a home builder and developer from Wilmington, Del. "However, builders expressed some optimism that sales will pick up in the coming months."
"Builders are waiting for consumers to feel more secure about their financial situation," said NAHB chief economist David Crowe. "Once job growth becomes more consistent, consumers will return to the market in larger numbers and that will boost builder confidence."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average," or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The index's components were mixed in May. The component gauging sales expectations in the next six months rose one point to 57, and the component measuring buyer traffic increased two points to 33. The component gauging current sales conditions fell two points to 48.
Looking at the three-month moving averages for regional HMI scores, the South rose one point to 48 while the Midwest fell a single point to 47, and the West posted a four-point drop to 47. The Northeast held steady at 33.
Advertisement
Related Stories
Market Data + Trends
10 States Where Home Insurance Rates Have Risen the Most
Responding to the increasing number of natural disasters, insurers are hiking prices, with some states bearing the brunt more than others
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth
