US housebuilder sentiment surges in June - NAHB
By Michele Maatouk
Date: Tuesday 16 Jun 2020
(Sharecast News) - Sentiment among US housebuilders surged in June, according to figures released on Tuesday.
The National Association of Home Builders/Wells Fargo housing market index rose 21 points from May to 58, posting its biggest monthly increase on record and comfortably beating consensus expectations of 45.
All the HMI indices posted gains, with the gauge of current sales conditions up 21 points to 63, while the index measuring sales expectations in the next six months jumped 22 points to 68 and the measure charting traffic of prospective buyers pushed up 22 points to 43.
"Housing clearly shows signs of momentum as challenges and opportunities exist in the single-family market," said NAHB chief economist Robert Dietz. "Builders report increasing demand for families seeking single-family homes in inner and outer suburbs that feature lower density neighbourhoods. At the same time, elevated unemployment and the risk of new, local virus outbreaks remain a risk to the housing market."
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The consensus forecast was very timid, given the astonishing surge in mortgage applications, which have now returned to their pre-Covid level. The NAHB index is still below its February level, 74, so we expect further gains over the next couple of months.
"The underlying story here seems to be that most of the millions of people who lost their jobs in the wave of lockdown layoffs were younger renters; the median new homebuyer is 47. With average 30-year mortgage rates down some 60 basis points over the past few months, new homes have become significantly more affordable for people who have kept their jobs, so demand has recovered. Housing, along with auto sales, likely will see the quickest and steepest V in the whole economy."
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