U.S. Homebuilder Sentiment Rises to 10-Month High in May
Tight housing supply boosted demand for new construction leading to homebuilder sentiment rising to a 10-month high, even as tightening credit conditions were becoming a challenge. The Increasing five points, the National Association of Home Builders/Wells Fargo Housing Market index has risen to a reading of 50 this month. This fifth straight monthly increase has lifted the index to the midpoint mark of 50 for the first time since July 2022.
According to Reuters, “new home construction is taking on an increased role in the marketplace because many home owners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level,” said National Association of Home Builders (NAHB) Chairman Alicia Huey in a statement.
Huey said despite the rising optimism, builders continued to face challenges to meet growing demand for new homes.
“These include shortages of transformers and other building materials, and tightening credit conditions for residential real estate development and construction brought on by the actions of the Federal Reserve to raise interest rates,” said Huey.