PhotoIf you build them, they will come.

That seems to be the outlook of the nation's home builders, who remain confident in the market for newly-built single-family homes.

The National Association of Home Builders (NAHB) reports the NAHB/Wells Fargo Housing Market Index (HMI) is unchanged in May at a level of 58. A reading above 50 indicates that more builders view conditions as good than poor.

“Builder confidence has held steady at 58 for four straight months, which indicates that the single-family housing sector remains in positive territory,” said NAHB Chairman Ed Brady. “However, builders are facing an increasing number of regulations and lot supply constraints.”

The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor." The survey asks builders to rate traffic of prospective buyers as "high to very high," "average," or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index.

The HMI components measuring sales expectations in the next six months increased three points to 65, while the component charting current sales conditions and the index gauging buyer traffic both held steady at 63 and 44, respectively.

Looking at the three-month moving averages for regional HMI scores, the South and Midwest both registered one-point gains to 59 and 58, respectively. The West was unchanged at 67 and the Northeast fell three points to 41.

“The fact that future sales expectations rose slightly this month shows that builders are confident that the market will continue to strengthen,” said NAHB Chief Economist Robert Dietz. “Job creation, low mortgage interest rates and pent-up demand will also spur growth in the single-family housing sector moving forward.”   


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