Housing Market Index Unchanged at 61 in May
|May 16, 2002|
Indicating that the nation?s builders view the market for new single-family homes as sound and stable, the National Association of Home Builders? Housing Market Index (HMI) for May remained unchanged from April?s healthy, upwardly revised reading of 61. The HMI has held within three points of this strong reading since the beginning of the year.
"With interest rates on long-term mortgages hovering below 7 percent in recent weeks and the spring home buying season off to a good start, home builders have every reason for continued optimism about their sales prospects," said Gary Garczynski, NAHB president and a builder/developer from Woodbridge, Va. "However, builders in many markets are still expressing concerns about availability and pricing of lots for development. In some areas, housing affordability is being compromised by no-growth mandates."
The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Home builders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair" or "poor." They are also asked to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for responses to each component are used to calculate a seasonally adjusted index, where any number over 50 indicates that more builders view sales conditions as good than poor.
The HMI for May remained unchanged from the previous month?s index, which was revised upward by a single point to 61. The index gauging current sales rose one point to 66 in May, while the index gauging builders? sales expectations for the next six months declined one point to a still very healthy 69 reading. The index gauging traffic of prospective buyers dropped one point to 45.
"Now that the nation?s housing industry has helped lead the economy out of recession, builders see continued stability in the market for new single-family homes," said Garczynski. "For this year, we?re expecting around 900,000 sales ? down only marginally from last year?s remarkable, record-setting pace of 908,000."
Source: National Association of Home Builders