The spring selling season is beginning to wind down for the residential housing market, and homebuilder sentiment has started to soften. For the month of June, homebuilder sentiment dropped two points, falling to 68 from May’s reading and the consensus expectation of 70. The overall trend for sentiment is still higher, but since peaking at 74 back in December, homebuilders have been in a little bit of a funk as mortgage yields have trended higher.
Weakness in this month’s report was pretty broad-based in terms of sales and traffic with every component pulling back. On a regional basis, however, the picture was more mixed. Sentiment in both the Midwest and South pulled back as it has been doing for some time now, while sentiment in both the West and Northeast ticked higher. The improved sentiment in the Northeast was most notable in that this month’s level of 61 is tied for the highest monthly reading in well over a decade.