Builder sentiment increased five points to 55 in June—the first time the index has risen above 50 since July 2022; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to MarketWatch. It reached a record high of 90 in November 2020.
The increase marks the sixth straight month of gains for the NAHB/Wells Fargo Housing Market Index. Economists expected the index to hit 51.
Of the homebuilder index’s three components, sales expectations in the next six months increased six points to 62; current sales conditions rose five points to 61; and buyer traffic rose four points to 37.
“A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year,” said NAHB Chief Economist Robert Dietz. “This month marks the first time in a year that both the current and future sales components of the HMI have exceeded 60 as some buyers adjust to a new normal in terms of interest rates.”
Twenty-five percent of builders reported cutting prices in June, which is down from 27% in May. Fifty-six percent of builders are using incentives compared with 54% in May and 62% in December 2022.
