Builder confidence in May rose two points to a level of 70 on the National Association of Home Builders/Wells Fargo Housing Market Index. This is the second highest level since the housing downturn, the NAHB said.
The HMI consists of three components: sales expectations in the next six months rose four points to 79; current sales conditions increased two points to 76; buyer traffic declined one point to 51.
"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 in a statement. "Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward."
The HMI in the Northeast and South went up three points each to 49 and 71, respectively. The West HMI rose one point to 78. The Midwest HMI was unchanged at 68.
