U.S. Home-Builder Sentiment Fell Sharply in May Amid Rising Mortgage Rates -- NAHB

By Xavier Fontdegloria

Confidence among home builders in the U.S. decreased for a fifth straight month in May as rising mortgage rates, increasing material costs and high prices for homes took a toll on demand, according to a survey from the National Association of Home Builders released Tuesday. Here are the report's main takeaways:

--The association's housing-market index--which gauges the single-family housing market--fell to 69 in May from 77 in April, its lowest level since June 2020, when activity started to recover from the Covid-19 pandemic trough. A number above 50 indicates that more builders view conditions as good rather than poor.

--Economists polled by The Wall Street Journal expected the indicator to decline to 75.

--"Housing leads the business cycle and housing is slowing," NAHB Chairman Jerry Konter said.

--"The housing market is facing growing challenges," NAHB Chief Economist Robert Dietz said. High costs of building materials and the sharp increase in mortgage rates mean that less than half of new and existing home sales are affordable for a typical family, he said.

--The decline of the index in May was driven by a sharp drop of the three components it is formed of. The index measuring traffic of prospective buyers declined nine points to 52; the measure gauging current sales conditions decreased eight points to 78, while the indicator measuring sales expectations in the next six months fell 10 points to 63.

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(END) Dow Jones Newswires

05-17-22 1014ET