U.S. home builder confidence in the market for newly built single-family homes increased for a second consecutive month in May, to the highest level since September of 2008, the National Association of Home Builders said Monday. The Housing Market Index [HMI] rose two points to 16 this month, suggesting the worst might be over for builders.
From NAHB: “The fact that the May [Housing Market Index] HMI continued to tick up from April’s five-point increase provides confirming evidence that the improved confidence level was no fluke,” [said] NAHB Chief Economist David Crowe. “This continued increase indicates that home builders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”
Two out of three of the HMI’s component indexes rose in May. The index gauging current sales conditions rose two points to 14, while the index gauging sales expectations for the next six months rose three points to 27. The index gauging traffic of prospective buyers remained unchanged, at 13.Regionally, the Northeast posted a three-point gain in its HMI score, to 18, while the South posted a one-point gain to 18, the West rose four points to 12, and the Midwest held even at 14.
In a separate report, NAHB said Monday its Housing Opportunity Index, or HOI — showed nationwide housing affordability jumped January-March to its highest on record. The median sales price of a new home fell to $201,400 in March, down 12.2% in the past year.
“Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime,” NAHB Chairman Joe Robson said.