The National Association of Home Builders/Wells Fargo Housing Market Index increased to 37 in May, up seven points following the largest single monthly decline in the history of the index in April.
NAHB Chairman Dean Mon noted that most states classifying housing as an essential business during this pandemic has helped keep residential construction workers employed. Chairman Mon also stated that builders are showing flexibility in this new business environment by implementing social media, virtual tours, and online closings to keep buyers informed and engaged.
“Low interest rates are helping to sustain demand,” said NAHB Chief Economist Robert Dietz. “As many states and localities across the nation lift stay-at-home orders and more furloughed workers return to their jobs, we expect this demand will strengthen. Other indicators that suggest a housing rebound include mortgage application data that has posted four weeks of gains and signs that buyer traffic has improved in housing markets in recent weeks. However, high unemployment and supply-side challenges including builder loan access and building material availability are near-term limiting factors.”
The HMI component measuring buyer traffic increased eight points to 21. The component measuring current sales conditions increased six points to 42, and the component measuring sales expectations in the next six months jumped ten points to 46.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 17, the Midwest increased seven points to 32, and the West moved twelve points higher to 44. The South rose eight points to 42.
Read the NAHB release.