Builder confidence stayed unchanged at a score of 58, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) release Monday morning. This is the fourth consecutive month that builders gave the same rating to the current situation, but May's mark is still 4 points higher than the 54 a year earlier. The Survey data are collected from builders' ratings of the housing market, and a score over 50 suggests that more respondents hold a positive outlook for the home building industry.
“Builder confidence has held steady at 58 for four straight months, which indicates that the single-family housing sector remains in positive territory,” said NAHB Chairman Ed Brady, in a statement. “However, builders are facing an increasing number of regulations and lot supply constraints.”
Expected single family sales for the next 6 months took a notch up in this month to a reading of 65 from last month's 62. Present sales conditions and traffic of prospective buyers remained stable at 63 and 44, respectively. All three components posted gains compared to a year earlier.
“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” said NAHB Chief Economist Robert Dietz, in a statement. He noted that sales in the single-family housing sector will continue to gain momentum as a result of the rising labor market, historically-low mortgage interests and pent-up demand.
By region, the Midwest and South both posted positive month-over-month results for the month, standing at 59 and 60, respectively. Builder confidence in the Northeast dropped to 41 in May from 44 in April, while the West stayed unchanged at 67 for the fourth straight month.
All scores have caught up with the pre-recession level last seen in early 2006. During the eight years of recovery, the composite index fell to a low of 9 in Dec. 2008. Individual components of the HMI dropped to their lowest point in December 2009, when builders rated current sales conditions at an 8, future sales expectations at a 17, and traffic from prospective buyers at a 7.
Read more about today's release from the NAHB >>
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