frustrated this spring with the limited inventory of existing homes, at least one segment of the housing market is seeing a silver lining: new home builders.
Builder confidence in the market for newly built single-family homes in May rose five points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This marks the fifth straight month that builder confidence has increased and is the first time that sentiment levels have reached the midpoint mark of 50 since July 2022. Scores over 50 indicate that builders view market conditions as “good” rather than “fair” or “poor.”
One reason for the limited supply of homes has been the sub-5% mortgage interest rates that 85% of current mortgage holders are locked in to, which discourages current homeowners from selling their home and buying another at today’s elevated interest rates.
Current mortgage rates 2023
Total housing inventory registered at the end of March was 980,000 units, up 1% from February and 5.4% from one year ago (930,000), but the country has just a 2.6-month supply of homes, far lesser than the five to six months needed for a balanced market, according to the National Association of Realtors.
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Source: usatoday.com