by Calculated Risk on 5/15/2019 10:04:00 AM
Wednesday, May 15, 2019
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 66 in May, up from 63 in April. Any number above 50 indicates that more builders view sales conditions as good than poor.
From NAHB: Builder Confidence Posts Solid Gain in May
Builder confidence in the market for newly-built single-family homes rose three points to 66 in May, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Builder sentiment is at its highest level since October 2018.Click on graph for larger image.
“Builders are busy catching up after a wet winter and many characterize sales as solid, driven by improved demand and ongoing low overall supply,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn. “However, affordability challenges persist and remain a big impediment to stronger sales.”
“Mortgage rates are hovering just above 4 percent following a challenging fourth quarter of 2018 when they peaked near 5 percent. This lower-interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace,” said NAHB Chief Economist Robert Dietz. “At the same time, builders continue to deal with ongoing labor and lot shortages and rising material costs that are holding back supply and harming affordability.”
All the HMI indices posted gains in May. The index measuring current sales conditions rose three points to 72, the component gauging expectations in the next six months edged one point higher to 72 and the metric charting buyer traffic moved up two points to 49.
Looking at the three-month moving averages for regional HMI scores, the Northeast posted a six-point gain to 57, the West increased two points to 71, the Midwest gained one point to 54, and the South rose a single point to 68.
This graph show the NAHB index since Jan 1985.
This was above the consensus forecast.