5/18/2015
By Jennifer Coombs

The National Association of Home Builders (NAHB) had been signaling strength for quite a while in the new home market, but that has yet to manifest itself in the numbers for May 2015. The NAHB composite housing market index fell by 2 points in April to a reading of 54, which was well below the low-end of economists’ expectations. This decline is reflective of a 2-point drop in the present sales component, but this remains well above the 50-breakeven level at a reading of 59. The traffic component also declined to a very weak reading of 39. The weakness noted in traffic has long been a major feature of this report, and it underscores the lack of first-time buyers in the housing sector. However, a positive in this report is a 1-point gain in future sales (next 6 months) on top of an already very strong reading. On a regional basis, the South, Midwest, and West all remain in expansionary territory for new homes, while the Northeast continues to lag far behind. Despite the apparent strength in this report, the construction and sales of new homes continues to hold down the broader economy. 

Jennifer Coombs
Wall Street Strategies

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