According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence fell eight points to 69 in May, marking the fifth straight month of decline in the builder sentiment portion. The builder sentiment posting marks the lowest since June 2020.

 
May marked major losses. The HMI gauged current sales conditions fell eight points to 78, the marker for sales expectations in the next six months dropped 10 points to 63 while the component charting prospective buyers posted a nine-point decline at 52 points.

"The housing market is facing growing challenges," NAHB Chief Economist Robert Dietz explained, "Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates."

Three-month moving averages of regional HMI scores shows the Northeast holding steady at 72, the Midwest took a seven point dip and landing at 62, meanwhile the South fell two points to 80 and the West also saw a six-point decline to 83.


https://www.nahb.org/news-and-economics/press-releases/2022/05/builder-confidence-plunges-on-rising-interest-rates-growing-affordability-woes