No change in builder confidence in housing market

For the month of May, builder confidence in the market for newly built, single-family homes holds steady at the low level of 16, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released May 16. The index has stayed at this level for six out of the past seven months, according to a piece on the National Association of Home Builders’ website.

The number comes from a monthly survey that NAHB has been conducting for more than 20 years. The HMI quantifies builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to determine a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. 

Both the index gauging current sales conditions and the index gauging traffic of prospective buyers inched up one point in May, to 16 and 14, respectively. Although these numbers are still very low, a bright spot of news is that the traffic gauge is now at its highest point since May of 2010. However, the index gauging sales expectations in the next six months declined two points to 20 in May. 

For more information: http://www.nahb.com/news_details.aspx?newsID=12655