Homebuilder sentiment saw a stronger than expected increase in May as the NAHB sentiment survey rose more than expected to 66 from 63 and expectations of 64. Even after this month’s increase, sentiment remains well off its cycle high of 74 from December 2017, but it does erase much of the swift leg lower we saw in Q4 of 2018.
Looking at a breakdown of this month’s report by sales, traffic, and regional trends, gains were broad-based. The only category that didn’t see a boost was sentiment in the Midwest. Present Sales saw the biggest increase in terms of sales and traffic trends, and like the headline index, these categories remain well off their cycle highs but have mostly erased their Q4 declines.
In terms of regional sentiment, the Northeast saw the largest jump, increasing by ten full points to 65. With that gain, sentiment in the Northeast region is now at its highest level since 2005. It’s also only the fourth month since 2013 where the Northeast didn’t have the lowest sentiment of any region. Now, imagine what would happen to sentiment in the region if the sun ever came out! If you haven’t ever done so before, now is the perfect time to start a two-week free trial to Bespoke Institutional to access all of our thought-provoking investment research and interactive investor tools.