“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. “However, builders are facing an increasing number of regulations and lot supply constraints.”
The reading comes from the NAHB/Wells Fargo Housing Market Index, which measures builder confidence in various areas. Any reading above 50 indicates that more builders view conditions as good than bad. Although the overall index held steady in May, the component measuring sales expectations for the next six months rose three points to 65.
“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” said Robert Dietz, NAHB chief economist. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”
Regionally, the HMI scores for the South and Midwest both saw one-point gains in May, rising to 59 and 58, respectively. The West held steady at 67 and the Northeast saw a three-point drop to 41.
Builder confidence in the market for new single-family homes remained unchanged at a level of 58 in May, according to new data from the National Association of Home Builders.