Single-family home builder confidence soared five points in May to its highest level in exactly five years, according to today’s National Association of Home Builders/Wells Fargo Housing Market Index. After briefly stumbling in April for the first time in seven months, the index continued its steady climb reaching 29. (April’s initial report of 25 was downwardly revised to 24.)
“Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April,” said NAHB Chairman Barry Rutenberg. “It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase.”
However, conditions are still far from ideal for builders; more builders view conditions as good than poor only when the index surpasses 50. David Crowe, the association’s chief economist, noted that poor access to credit, inaccurate appraisals and rising material costs still pose significant obstacles to builders’ livelihood.
Still, builders reported more traffic in May and better sales expectations. The index ticked up by 6 points in the Northeast to 32 and by 5 points in the Midwest and South, to 27 and 28, respectively. Only the West experienced a decline, as confidence fell 2 points to 29. — Adam Fusfeld