Home builder sentiment falters

Home builder sentiment faltered in May as the NAHB index fell 6 pts m/o/m to back under 50 at 45. The estimate was exactly 50. Both the Present Situation and Expectation components were down m/o/m and Prospective Buyers Traffic declined by 4 pts m/o/m to just 30, a 4 month low and well below 50.

Sticky mortgage rates around the 7% level seem to be weighing on confidence, especially after builders were all hoping, as was EVERYONE in real estate of all kinds, heading into the year that interest rates would fall notably this year. To remind you, in the May UoM consumer confidence index seen Friday, the Good Time to Buy a Home index fell to the lowest on record dating back to when the question was first asked in 1978 and which explains the depressed level of ‘Prospective Buyers Traffic.’