Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index remained unchanged once again in May at a score of 58 — the same level as February, March and April — the NAHB reported Monday.
- Within the index, builders' expectations for sales in the next three months rose three points to 65. Predictions for buyer traffic and current sales conditions both held at their previous scores of 44 and 63, respectively.
- May's results were just shy of expectations, as economists surveyed by The Wall Street Journal had expected builder confidence to rise one point in May to 59.
Dive Insight:
NAHB Chairman Ed Brady said the consistent nature of the index over the last four months "indicates that the single-family housing sector remains in positive territory." However, he said in a release, "Builders are facing an increasing number of regulations and lot supply constraints."
Builders have pointed to increased regulation as one of the main factors keeping them from ramping up production of new homes. A recent National Association of Home Builders study found that an average of 24.3% of a home’s final selling price is made up of local, state and federal regulatory costs.
NAHB Chief Economist Robert Dietz said he was optimistic about the market due to the rise in future sales expectations. "Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward," he said in a release.
The builder confidence index marks the first in the line of housing market reports for the month, with housing starts released Tuesday and existing home sales released Friday.
