Home builder confidence jumped in May from April fueled by improved demand and ongoing low overall supply, reports the National Association of Home Builders (NAHB). The NAHB's Housing Market Index rose to 66 in May, above the 63 posted in April and to the best level since October 2018. However, the NAHB says affordability challenges still persist. The NAHB went on to say that the low mortgage interest rate environment, strong labor market along with rising wages is contributing to a gradual improvement in the marketplace. Any number over 50 indicates that more builders view conditions as good than poor.
American consumers pulled back on spending in April as sales of autos decreased along with spending on clothes appliances. US retail sales disappointed last month, declining 0.2% in April versus the +0.2% expected and well below the gain of 1.7% seen in March, which was the strongest rise since 2017. When stripping out autos, sales rose a scant 0.1%, well below the +0.6% expected. Retail sales are closely scrutinized as consumer spending drives a large portion of US economic activity.
Mortgage rates held steady in the latest survey and remain at 12-month lows due in part to slowing global growth along with low inflation levels here in the US. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage was essentially unchanged in the latest week at 4.40% with an average 0.40 point. The MBA went on to say that its Market Composite Index, a measure of total mortgage loan application volume, fell 0.6%, while the Refinance and Purchase Index fell by just about 1%.