Home builder confidence in the market for the new construction of single-family homes increased two points in May to a level of 70, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. This is the second highest HMI reading since the downturn.
Three out of the four different regions of the country saw the three-month moving averages increase in May like the Northeast and South which posted three-point gains to 49 and 71 and the West rose one point to 78. The Midwest remains the same at 68.
The sales index charting sales over the next six months climbed four points to 79 in May while the index gauging current sales conditions had risen two points to 76. Meanwhile, the component measuring buyer traffic was down slightly by one point to 51.
NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas had said, “This report shows that builders’ optimism in the housing market is solidifying, even as they deal with higher building material costs and shortages of lots and labor.”
“The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market,” said NAHB Chief Economist Robert Dietz. “Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”