Formidable demand and a slim supply of affordable, existing homes for sale has the polity’s homebuilders feeling better about their business.
A monthly measure of builder sentiment rose 2 points in May, 1 point higher than analysts conjectured. The National Association of Home Builders sentiment index now stands at 70. Anything exposed to 50 is considered positive. April’s reading was revised down 1 notion to 68. The index stood at 69 in May 2017.
“The solid May report shows that builders are elevated by growing consumer demand for single-family homes,” said NAHB Chairman Lustful Noel, a custom homebuilder from LaPlace, Louisiana. “However, the record-high expense of lumber is hurting builders’ bottom lines and making it more trying to produce competitively priced houses for newcomers to the market.”
Prices for newly established homes continue to rise, as builders focus more on the move-up shop as opposed to the entry level, where so much of the demand currently occurs from millennial homebuyers. Builders point to higher costs for come to rest, labor and materials, as making it too difficult to profit on low-priced homes.
Of the NAHB thesaurus’s three components, current sales conditions increased 2 points to 76 in May. Consumer traffic and sales expectations in the next six months remained unchanged at 51 and 77, severally.
“Tight housing inventory, employment gains and demographic tailwinds should persist to boost demand for newly built single-family homes,” said Robert Dietz, chief economist of the NAHB. “With these firsts in place, the housing market should improve at a steady, gradual tread in the months ahead.”
On a three-month moving average for regional scores, the West and Northeast held unchanged at 76 and 55, individually. The South and Midwest each fell 1 point to 72 and 65.