U.S. NAHB housing market index rises above expectations in May

The U.S. NAHB housing market index of homebuilder sentiment rose in May from the previous month. The sentiment rose from 68 in April to 70 in May. This is slightly above the consensus expectations of 68. The expectations for present single family sales was up 2 points to 76, while the future sales index rose robustly to 79 from 74.

Prospectively buyers’ traffic dropped lower to 51 from earlier print of 52; however, it continues to be at the higher end of its post-recession range. Region-wise, the rebound in the confidence was mainly driven by the Northeast, West and South regions. In the meantime, confidence weakened slightly in the Midwest.

While a slight moderation is expected in the housing activity in the near term due to higher mortgage rates, the scenario for 2017-2018 continues to be one of modest trend improvement, noted Barclays in a research report.

“We view homebuilder sentiment at current levels as consistent with our view of a continued, albeit modest, housing market recovery”, added Barclays.