A key measure of housing market confidence has risen this month following a weaker month in April.
The National Association of Home Builders / Wells Fargo Housing Market Index was up 2 percentage points to 70, the fourth time this year that it has been at that level or above.
“The solid May report shows that builders are buoyed by growing consumer demand for single-family homes,” said NAHB Chairman Randy Noel. “However, the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.”
The components of the index reveal that builders’ sentiment is up for current conditions, although there was no change in measures of buyer traffic or sales expectations in the next 6 months.
The three-month moving averages for the regions shows no movement for the West (76) and Northeast (55) while the South (72) and Midwest (65) each edged down 1 point.
“Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes,” said NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”
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