051517 NAHB TableAfter a weak start to the week on the economic front, homebuilder sentiment for the month of May surprised to the upside.  According to the NAHB, homebuilder sentiment rose from a level of 68 (which was also the consensus expectation) to 70, which marks the second highest monthly reading of the recovery.  The table to the right and charts below break out this month’s report by region and category.  In terms of sales and traffic, homebuilders are seeing and expecting a pickup in sales, even as traffic declined slightly.  In the case of Future Sales, sentiment hit its highest level since June 2005, so a cycnic could still argue that the majority of the improved sentiment is built on optimism rather than actual conditions, although we would note that the gauge of Present Sales is also near a high.

On a regional basis though, every region besides the Midwest saw a pickup in sentiment this month.  The biggest gain this month was in the Northeast as the spring selling season kicks into gear.  That said, sentiment in this region is still well off its highs of the cycle.  The only region of the country where homebuilder sentiment hit a new cycle high was in the South.

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051517 NAHB Chart

051517 NAHB Chart Region

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