Home builders remained considerably downbeat as market conditions continued to erode in May, according to the NAHB/Wells Fargo Housing Market Index (HMI). The HMI fell a single point to 19, bringing it within one point of the record low 18 set in December 2007 (the series began in January of 1985).
The NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as either “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The HMI’s component index gauging current sales conditions declined one point to 17 in May -- its lowest level since the series began in January 1985. Meanwhile, the component gauging sales expectations for the next six months declined three points to 27, and the component gauging traffic of prospective buyers declined two points to 17.
The HMI fell in three out of four regions in May, with a four-point decline to 18 registered in the Northeast, a three-point decline to 12 registered in the Midwest (also an all-time low) and a two-point decline to 22 posted in the South. The West posted a three-point gain to 20 this month but remained well below the level of a year earlier.