Home Builders: Thin Inventories Spur 'Sense of Urgency' from Buyers

Home Builders: Thin Inventories Spur 'Sense of Urgency' from Buyers  Builder confidence in the housing market for single-family homes surged this month as urgency is creeping into low-inventory, high-demand areas.
The index from the National Association of Home Builders and Wells Fargo jumped three points to a 44 reading, from a downwardly revised 41 in April.
Scores for each component are used to calculate a seasonally-adjusted index where any number over 50 indicates that more builders view conditions as good — rather than poor.
The increase for May reflects improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.
“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 local economies,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor.”
The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53 – its highest level since February of 2007.
The index that measures traffic of prospective buyers gained three points to 33.
“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,” said NAHB Chief Economist David Crowe.
No movement was recorded in the three-month moving average for the Northeast, Midwest or South, which held unchanged at 37, 45 and 42, respectively. Only the West recorded a decline, of six points to 49 in May

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