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Builder confidence for new single-family homes declined for the fifth straight month in May, falling to the lowest level in nearly two years.
Source: National Association of Retail Builders
XHB. is up 0.12%, while ITB is up 0.21%.
The NAHB/Wells Fargo Housing Market Index declined by eight points to 69 in May, marking the lowest level since June 2020. This is attributed to the decline in affordability amid the steep increase in interest rates.
NAHB Chairman Jerry Konter noted that the business cycle is led by housing which has indicated a slowdown, reiterating the need to build more homes to ease the nation’s housing affordability crisis.
NAHB Chief Economist Robert Dietz cited the 19% annual increase in building material costs, along with mortgage rates up to a 12-year high, with less than half of new and existing home sales affordable for a typical family.
All three HMI indices reflected steep losses during the month — current sales conditions down eight points to 78, sales expectations down 10 points to 63, and traffic of prospective buyers down nine points to 52.
Declines in builder confidence were recorded in the Midwest and the South, while the Northeast held steady.
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