Builder Confidence Strengthens in May
Builder confidence in the market for newly built, single-family homes improved three points to a 44 reading on the NAHB/Wells Fargo Housing Market Index (HMI) for May, released this Wednesday. The gain was from a downwardly revised 41 reading in April, and reflected improvement in all three index components. Specifically, the component gauging current sales conditions increased four points to 48, the component gauging sales expectations for the next six months edged up a single point to 53 – its highest level since February of 2007 -- and the component gauging traffic of prospective buyers gained three points to 33.
In general, builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies. This is seen as an encouraging sign, even as concerns related to costs and supplies of building materials, lots and labor are rising in some markets. Commenting on the latest survey findings, NAHB Chief Economist David Crowe noted that, “While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force."
Drilling down to the regional picture, three-month moving averages of HMI scores didn't budge this time around for the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May.
Housing Starts Slipped, But Permits Rallied in April
- Combined starts activity was down 12.8% in the Northeast,
- 27.9% in the South and
- 6.2% in the West, but increased
- 10.9% in the Midwest.
- the Midwest had a 22.3% increase,
- the South a 16% gain and
- the West a 12.9% improvement.
- The Northeast posted a 2% decline.
- Tags: ADI News
- Joanne Loftus