An index measuring builder confidence for constructing newly built, single-family homes rose three points, to 22, in May, beating analysts’ expectations. According the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released Monday, May 17, the HMI is at its highest point since August 2007.
Analysts at High Frequency Economics in Valhalla, New York, predicted a slight dip in the HMI to 18 after April’s rise to 19, which was fueled by the now-expired tax credit.
“The really encouraging part of today’s HMI is that sales expectations for the next six months continued to gain, despite the expiration of the home buyer tax credits at the end of April,” said NAHB Chief Economist David Crowe. “This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home–low interest rates, great selection, stabilizing prices, and a recovering job market–are taking the place of tax incentives to generate buyer demand.”