U.S. home builders expressed an improved outlook for real estate market trends, according to an industry report released today. Learn more.
U.S. home builders report increasing optimism over real estate market trends in May, reversing a three-month decline in outlook, according to data released today by the National Association of Home Builders that
The association’s Housing Market Index rose to a reading of 44, a three-point gain over the downwardly revised 41 for April. The index tracked improvements in all three of its components – current sales conditions, sales expectation and buyer traffic – but remains well below the break-even point of 50, which indicates an equal number of builders view real estate market trends as positive or negative.
Builder confidence had declined February through April amid concerns over rising constructions costs, difficulty obtaining credit, and potential shortages of both construction workers and buildable lots, according to the association.
“While industry supply chains will take time to re-establish themselves following recession-related cutbacks, builders’ views of current sales conditions have improved and expectations for the future remain quite strong as consumers head back to the market in force,” David Crowe, chief economist for the association, said in a statement analyzing real estate market trends for May.
Builders’ perceptions of current sales conditions rose four points to 48, and their expectations for future sales increased by one point to 53 – the highest it’s been since February 2007. The gauge of traffic of prospective buyers rose three points to 33.
In other signs of improving real estate market trends, real estate investment trusts, or REITs, outperformed the S&P in April. Click here to learn more.
“Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening of local economies,” Rick Judson, the association’s chairman, said in a statement.
Learn more about the accelerating improvement in home prices by clicking here.
In other real estate market trends to be reported week, the Commerce Department tomorrow is scheduled to release data on construction activity for the month of April.