Confidence among homebuilders in U.S. held steady in May

WASHINGTON – Confidence among U.S. homebuilders held steady in May, signaling limited progress in residential real estate during the busy spring selling season, National Association of Home Builders/Wells Fargo data showed Monday.

The builder sentiment gauge was unchanged at 58, where it’s been for four straight months. Readings greater than 50 indicate that more respondents reported good market conditions. The median forecast in a Bloomberg survey of economists projected 59. The six-month sales outlook rose to 65, the highest this year.

Big picture

The figures suggest homebuilding won’t add much more to U.S. growth in coming months even with mortgage rates at the lowest levels in three years. Economists had been looking for gains in residential construction to give the economy a much-needed leg up as manufacturing was weighed down by weak growth abroad and the still relatively strong dollar. Housing, which was at the center of the last recession, wasn’t able to fulfill its role as a spark to the early phase of the expansion.

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Economist takeaways

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

The details

Sentiment among builders in Northeast dropped to the lowest level since June 2014. Confidence climbed in the South and Midwest and was unchanged in the West.

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