Dive Brief:
- The National Association of Home Builders/Wells Fargo Housing Market Index, released Monday, revealed a two-point dip in builder confidence for May.
- Economists polled by The Wall Street Journal had forecast the index would rise to 58 from 56 in April. An index score higher than 50 indicates that more builders are optimistic than not about homebuilding prospects for the coming months.
- On a bright note, May's index, at 54, showed confidence at nine points higher than during May 2014.
Dive Insight:
The components of May's index were mixed, as buyer traffic results dropped one point, sales expectations increased one point, and current sales conditions decreased two points.
The regional standouts of the survey were the Midwest and South, which each saw a one-point index bump. The Northeast dipped one point, and the West saw the greatest decrease of three points.
NAHB Chief Economist David Crowe attributed the fall to consumers "exhibiting caution" when deciding to make the plunge and purchase a home—delaying business for builders.
However, NAHB Chairman Tom Woods remains optimistic. “Despite this month’s slight dip, builder confidence in the new home market remains above the 50-point benchmark... Overall, the second quarter of 2015 is shaping up to be very solid,” he said.
The disappointing data resulted in dropping shares for most U.S. homebuilders, according to ABC News. Economists are keeping an eye on housing data this week, as April's housing starts and building permits will be released Tuesday, data on mortgage applications will be announced Wednesday, and existing home sales numbers will be released Thursday.
