Homebuilder sentiment perked up in May as the market for new single-family homes improved and a bill aimed at boosting housing supply gained traction in Congress.
Confidence in sales conditions, expectations for the next three months, and buyer traffic all increased in May, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
The index improved three points to 37 for the month. But the gauge, which rates builder confidence from a scale of 0 to 100, still remains firmly in bearish territory.
Builders have been largely cautious this year. The index fell to 38 points in March, then 34 points in April. Even amid the typically-busy spring buying season, builders are worried about inflationary pressures on the market, driven by the conflict in Iran and a rise in oil prices.
"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," said NAHB Chairman Bill Owens. "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."
This data comes in the same month that the U.S. Census Bureau and Department of Housing and Urban Development reported an increase in sales in February and March. While the census data lags the NAHB index, current and future expectation that buyers are looking for homes plays into builder sentiment.
This story will be updated.
Tristan Navera is a senior reporter on housing policy, covering trends and solutions in the housing market from Washington, DC. He was previously a senior reporter at Bloomberg Law, and before that covered real estate for the Washington Business Journal. Earlier in his career, he spent a decade reporting on business and real estate in Dayton and Columbus, OH. A Cincinnati native, he holds a journalism degree from Ohio University.
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