Home Builder Confidence, First Time Homebuyers, Manufacturing
May 16, 2016
Monday – May 16
Home builder confidence in May remained steady, though there have been an increasing number of hurdles to jump. The National Association of Home Builders reports that its single-family Housing Market Index remained at 58 for four straight consecutive months. Any number over 50 indicates that more builders view condition as good rather than poor. Builders have said that despite sentiment remaining positive, they are facing an increasing number of regulations and lot supply constraints.
A recent report out of FNC, industry data provider, says first time home-buyers will struggle this spring buying season. FNC cites higher costs and limited inventory as two main issues for first-time homebuyers. Home prices in April rose to $231,000, a 7.4% increase from last year. Home prices could eclipse what we saw in the 2006 and 2007 peak levels by as early as this summer. First-time homebuyers make up about 30% of total homebuyers.
The manufacturing sector took a hit today as the May Empire State Index fell 9.02, well below the +6.2 expected and well below the +9.6recorded in April. The key components of the index were mostly weak. The sector was looking for a rebound given the recent decline in the dollar. Manufacturing took a big hit in 2015 as the U.S. dollar strengthened against many global currencies. When the U.S. dollar is higher, it costs more for foreign countries to purchase our products.