Builder confidence in the newly built single-family home market increased three points to 37 in May, despite elevated land, labor and construction costs, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The measurement was still below the threshold of 50, signaling that more builders view the current market as poor than good. The last time the measurement was above 50 was April 2024 (51).
“The housing market remains soft as higher mortgage rates, rising gas prices and economic uncertainty related to the war in Iran continue to dampen buyer demand,” NAHB Chairman Bill Owens said. “However, efforts in the House to modify the 21st Century ROAD to Housing Act could increase the nation’s housing supply and help ease builder concerns,” he added.
“Recent increases for long-term interest rates will continue to hold back home buyer demand,” NAHB Chief Economist Robert Dietz said. “Although some regional markets, including parts of the Midwest, are showing relative strength, the housing market continues to face significant affordability challenges.”
According to the three-month moving averages for regional HMI scores, the Midwest rose one point to 43, the Northeast rose one point to 42, the South held at 35 and the West fell one point to 28.
Read the full report here.
