Homebuilders More Pessimistic in May

Homebuilder confidence edged down in the most recent month, according to the May National Association of Home Builders/Wells Fargo Housing Market Index report released today. 

After clocking in at a revised 46 points for April, May's reading edged down even further to 45, dashing analyst hopes for a recovery to 49. The number had been at 46 since a 10-point drop in February. In May 2013, the index clocked in at 44. 

Any number over 50 indicates that more builders view sales conditions as good than poor, a point reached in June 2013 for the first time  since April 2006. The survey looks at builder confidence in newly built single-family homes. 

"After four months in which the HMI has shown little signs of fluctuation, it is clear that builder sentiment is becoming more in line with the market reality of a continuing but modest recovery," said National Association of Home Builders Chairman Kevin Kelly in a statement today.

Digging deeper into components, May's index sent mixed messages. While current sales conditions dropped two points to 48, prospective buyer traffic squeaked up two points to 33. As a sign of expected better times ahead, future sales expectations for the next six months increased one point to 57.

NAHB Chief Economist David Crowe noted: "Builders are waiting for consumers to feel more secure about their financial situation. Once job growth becomes more consistent, consumers will return to the market in larger numbers and that will boost builder confidence." If the last two strong jobless claims reports are any evidence, a labor market recovery may be underway.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2959445, ~/Articles/ArticleHandler.aspx, 9/3/2014 3:43:35 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement