The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) fell two points to a level of 54 in May, but increased nine points from May 2014.
Two of the three components of the index experienced losses this month. The buyer traffic dropped one point to 39 and current sales conditions decreased two points to 59. The component charting sales expectations in the next six months rose one point to 64.
Two of the four regions posted gains in May. The South and the Midwest each increased one point to 57 and 55, respectively. The Northeast fell one point to 41 and the West fell three points to 55.
“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” said NAHB Chief Economist David Crowe. “On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.”