The National Association of Homebuilders (NAHB) announced on Tuesday its
housing market index (HMI) jumped to 50 in May from an unrevised April reading of 45. That marked the fifth straight
monthly improvement in builder confidence and was the highest reading since July
2022 (55).
Economists had anticipated the HMI to remain unchanged
at 45.
A reading over 50 indicates more builders view conditions as good than
poor.
All three of the major HMI components recorded
advances in early May. The component charting sales
expectations in the next six months climbed 7 points to 57, the component
tracking current sales conditions jumped 5 points to 56, and the component
measuring traffic of prospective buyers went up 2 points to 33.
Commenting on the latest report, NAHB Chief Economist Robert Dietz noted that the lack of
existing inventory continues to drive buyers to new construction. “With limited
available housing inventory, new construction will continue to be a significant
part of prospective buyers’ search in the quarters ahead,” he added.