The National Association of Home Builders/Wells Fargo Housing Market Index was unchanged at 83 in May.
NAHB Chairman Chuck Fowke noted that despite supply shortages, high levels of prospective home buyers and strong market conditions continue to keep builder confidence strong. However, Fowke noted that affordability is becoming a concern, especially for first-time and first-generation home buyers.
“Low interest rates are supporting housing affordability in a market where the cost of most materials is rising,” said NAHB Chief Economist Robert Dietz. “In recent months, aggregate residential construction material costs were up 12% year over year, and our surveys suggest those costs are rising further. Some builders are slowing sales to manage their own supply chains, which means growing affordability challenges for a market in critical need of more inventory.” Dietz warned that “home buyers should expect rising prices throughout 2021 as the cost of materials, land and labor continue to rise.”
The HMI component measuring buyer traffic was 73. The component measuring current sales conditions sales conditions was unchanged at 88 while the component measuring sales expectations in the next six months rose one point to 81.
Looking at the three-month moving averages for regional HMI scores, the South rose one point to 84, and the West held steady at 90. The Northeast fell four points to 82, and the Midwest decreased three-points to 75.
Read the NAHB release.