The National Association of Home Builders/Wells Fargo Housing Market Index decreased eight points to 77 in May. This is the fifth straight month that builder sentiment has declined and the lowest reading since June 2020.
“Housing leads the business cycle and housing is slowing,” said NAHB Chairman Jerry Konter. “The White House is finally getting the message and yesterday released an action plan to address rising housing costs that emphasizes a very important element long-advocated by NAHB – the need to build more homes to ease the nation’s housing affordability crisis.”
“The housing market is facing growing challenges,” said NAHB Chief Economist Robert Dietz. “Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates.”
The HMI component measuring buyer traffic decreased nine points to 52. The component measuring current sales conditions fell eight points to 78, and the component measuring sales expectations in the next sixth months fell ten points to 63.
Looking at the three-month moving averages for regional HMI scores, the Northeast held steady at 72 while the Midwest dropped seven points to 62, the South fell two points to 80 and the West posted a six-point decline to 83.
Read the NAHB release.
