Homebuilder sentiment in May posted its first decline since November, moving into negative territory. All three components of NAHB’s index decreased: current sales conditions declined six points to 51, buyer traffic decreased four points to 30, and sales expectations for the next six months fell nine points to 51.
On a positive note, single-family home completions surged 15% compared to March and were up nearly 14% year-over-year, reaching the highest level since November 2022.
“This is new supply that can immediately help offset current housing shortages,” said Odeta Kushi, deputy chief economist at First American.
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However, looking ahead, single-family permits – a leading indicator – decreased for the third straight month, signaling production may decline further. Single-family permits dropped 0.8% to a 976,000 unit rate, the lowest pace since August 2023. Overall, permits were down 3% to a 1.44 million unit annualized rate in April.
