Builders' confidence in the market for newly built, single-family homes was unchanged in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. Confidence was at the low level of 16, which is where it has been for six of the last seven months.
Both the index gauging current sales conditions and the index gauging traffic of prospective buyers went up one point in May, to 16 and 14, respectively. Although low, the traffic gauge is at its highest point since May of 2010. The index gauging sales expectations in the next six months declined two points to 20.
"Builder confidence has hardly budged over the past six months as persistent concerns regarding competition from distressed property sales, lack of production credit, inaccurate appraisals, and proposals to reduce government support of housing have continued to cloud the outlook," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "In addition, many builders in this month's survey cited high gas prices as a further contributor to consumer anxiety and reluctance to go forward with a home purchase."
The NAHB/Wells Fargo Housing Market Index uses a monthly survey to gauge 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 used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
For the full release on May's Housing Market Index, click here.
