US builder morale hits 7M peak in May

US builder morale hits 7M peak in May

Mubasher: US home builder grew more confident in May, amid as demand for newly-built single-family houses improved, data showed on Wednesday.

The National Association of Home Builders’ (NAHB) monthly confidence index, which gauges the newly-built single family home market outlook, advanced by three points to 66 in May.

“Builders are busy catching up after a wet winter and many characterize sales as solid, driven by improved demand and ongoing low overall supply,” NAHB Chairman Greg Ugalde said.

This marked the highest level of builder sentiment seen since October 2018.

The current sales conditions index, which is one of the components of the overall NAHB index, gained three points to 72, while the gauge of the expected sales in the coming six months went up by one point to 72 and the buyer traffic tracker roe two points to 49.

“However, affordability challenges persist and remain a big impediment to stronger sales,” Ugalde noted.

Mortgage rates are above 4% after going through a rough patch during the fourth quarter of the prior year, when they hit a high of 5%, according to NAHB senior economist Robert Dietz.

“This lower-interest rate environment, along with ongoing job growth and rising wages, is contributing to a gradual improvement in the marketplace,” Dietz said.