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The Week Ahead: Watching Market Conditions Following Unusual Highs

On Monday at 10 a.m. EST, the National Association of Homebuilders (NAHB) and Wells Fargo will release their latest Housing Market Index (HMI) for May, a measure of market conditions based on three factors, with a range of zero to 100.

While the March HMI was unusually high, reaching 71, April stayed steady at 65. All three individual components (present single family sales, next six-month single family sales, and prospective buyer traffic) reported losses month over month, but were still strong.

The prospective buyer traffic component indicated rising interest in new home sales, as it scored above the breakeven level of 50. It topped 52 in April, a slight drop from 53 in March.

Present single-family sales and single-family sales for the next six months both showed slight decreases month-over-month, but remain high. Present single-family sales for April dropped to 74 from 77 in March, and single-family sales for the next six months dropped to 75 from 78 in March.

NAHB reports that there is a continuing demand for home construction, although builders have faced several challenges such as high regulatory costs and increasing material prices.

The NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months, and also asks builders to rate traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Data from the NAHB/WellsFargo HMI can be found here.

This Week’s Schedule

Fannie Mae Economic & Housing Outlook, Tuesday

Housing Starts, Tuesday, 8:30 a.m. EST

Collingwood Group Chairman Tim Rood on Fox Business Network’s Cavuto, Tuesday, 12 p.m. EST

MBA Mortgage Applications, Wednesday, 7 a.m. EST

About Author: Seth Welborn

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