Builders’ confidence in the market for new single-family homes surged in May, as the National Association of Home Builders’ housing market index — a monthly gauge of builder sentiment —– climbed to 22 from April’s level of 19, the group announced yesterday.
The index is now at its highest point since August 2007.
Thomson Reuters’ poll of economists predicted a level of 20.
“The really encouraging part of today’s HMI is that sales expectations for the next six months continued to gain, despite the expiration of the home buyer tax credits at the end of April,” said NAHB chief economist David Crowe.
“This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home — low interest rates, great selection, stabilizing prices, and a recovering job market — are taking the place of tax incentives to generate buyer demand.”
Crowe noted that while builder confidence improved from the lows posted during the housing downturn, it remains depressed by historic standards.
The current single-family home sales index surged to 23 from 20, and the sales expectations index for the next six months gained to 28 from 25.
The traffic of prospective buyers index grew to 16 from 13.