Builder confidence in the U.S. market for newly built, single-family homes was up five points in May 2012 from a downwardly revised reading in the previous month to reach 29 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the index's best reading since May of 2007.
"Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause this April," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, FL. "It seems we have resumed the gradual upward trend in confidence that started at the beginning of this year, as stabilizing prices and excellent affordability encourage more people to pursue a new-home purchase."
"While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back," said NAHB Chief Economist David Crowe. "The pace of this emerging recovery could be stronger were it not for the significant impediments that the market continues to face with regard to builder and consumer access to credit, inaccurate appraisals, and more recently, rising materials prices."
Each of the index's components rebounded from declines in the previous month:
* The component gauging current sales conditions rose five points to 30 in May.
* The component gauging traffic of prospective buyers also rose 5 points in May, to reach 23 - its highest level since April of 2007.
* The component gauging sales expectations in the next six months rose 3 points to 34.
Three out of four regions registered improving builder sentiment in May:
* Northeast: 6-point gain to 32
* Midwest: 5-point gain to 27
* South: 5-point gain to 28
* West: 2-point decline to 29
to Daily News