By Jill Mislinski
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales, and below 50 indicates a negative outlook.
The latest reading of 70, down 2 from last month’s revised number, came in at the Investing.com forecast.
Here is the opening of this morning’s monthly update:
Builder confidence in the market for newly-built single-family homes rose two points to a level of 70 in May after a downwardly revised April reading on the National Association of Home Builders/Wells Fargo Housing Market Index (NYSE:HMI). This is the fourth time the HMI has reached 70 or higher this year.
“The solid May report shows that builders are buoyed by growing consumer demand for single-family homes,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “However, the record-high cost of lumber is hurting builders’ bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market.” [link to report]
Here is the historical series, which dates from 1985.
The HMI correlates fairly closely with broad measures of consumer confidence. Here is a pair of overlays with the Michigan Consumer Sentiment Index (through the previous month) and the Conference Board’s Consumer Confidence Index.