• Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
  • PRODUCTS
  • A&D
  • INSTALLATION
  • MARKETS
  • AWARDS
  • EDUCATION
  • BUYER'S GUIDE
  • MEDIA
  • EMAGAZINE
  • SIGN UP
cart
facebook twitter linkedin youtube
  • NEWS
  • Breaking Flooring News
  • eNewsletters
  • PRODUCTS
  • Carpet & Area Rugs
  • Hardwood
  • Installation Products
  • Installation Tools & Equipment
  • Laminate
  • Resilient
  • Specialty
  • Tile & Stone
  • MARKETS
  • Commercial
  • Residential
  • AWARDS
  • Installation Awards
  • Top Flooring Products
  • EDUCATION
  • Continuing Education
  • Webinars
  • Sponsored Insights
  • MEDIA
  • FLOOR Podcast
  • Videos
  • TISE 2025 Videos
  • eBooks
  • EMAGAZINE
  • eMagazine
  • Archive Issues
  • Contact
  • Advertise
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
    • Breaking Flooring News
    • eNewsletters
  • PRODUCTS
    • Carpet & Area Rugs
    • Hardwood
    • Installation Products
    • Installation Tools & Equipment
    • Laminate
    • Resilient
    • Specialty
    • Tile & Stone
  • A&D
  • INSTALLATION
  • MARKETS
    • Commercial
    • Residential
  • AWARDS
    • Installation Awards
    • Top Flooring Products
  • EDUCATION
    • Continuing Education
    • Webinars
    • Sponsored Insights
  • BUYER'S GUIDE
  • MEDIA
    • FLOOR Podcast
    • Videos
    • TISE 2025 Videos
    • eBooks
  • EMAGAZINE
    • eMagazine
    • Archive Issues
    • Contact
    • Advertise
  • SIGN UP
Breaking Flooring News

Lack of Existing Inventory Boosts Builder Confidence to Key Marker

nahb-logo (1).jpg
May 16, 2023

Limited existing inventory, which has put a renewed emphasis on new construction, resulted in a solid gain for builder confidence in May even as the industry continues to face several challenges, including building material supply chain disruptions and tightening credit conditions for construction loans.

Builder confidence in the market for newly built single-family homes in May rose five points to 50, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This marks the fifth straight month that builder confidence has increased and is the first time that sentiment levels have reached the midpoint mark of 50 since July 2022.

“New home construction is taking on an increased role in the marketplace because many home owners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala. “While this is fueling cautious optimism among builders, they continue to face ongoing challenges to meet a growing demand for new construction. These include shortages of transformers and other building materials and tightening credit conditions for residential real estate development and construction brought on by the actions of the Federal Reserve to raise interest rates.”

“Lack of existing inventory continues to drive buyers to new construction,” said NAHB Chief Economist Robert Dietz. “In March, 33% of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7% average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”

And with interest rates more than doubling from 2021, the HMI survey shows incentives have played a key role in attracting buyers in this new economic climate and that the use of these sales inducements are gradually slowing across the board:

  • The share of builders reducing home prices dropped to 27% in May, down from 30% in April, 31% in Feb. and March, and 36% last November.
  • The average price reduction remains at 6%, unchanged for the past four months.
  • 54% offered some type of incentive to bolster sales in May, down from 59% in April and 62% last December.

Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” 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. 

All three major HMI indices posted gains in May. The HMI index gauging current sales conditions rose five points to 56, the component charting sales expectations in the next six months increased seven points to 57 and the gauge measuring traffic of prospective buyers increased two points to 33.

Looking at the three-month moving averages for regional HMI scores, the, the Midwest edged up two points to 39, the South increased three points to 52 and the West moved three points higher to 41. The Northeast held steady at 45.

HMI tables can be found at nahb.org/hmi.

For more recent articles on NAHB, click here.

KEYWORDS: housing market market reports market trends National Association of Home Builders (NAHB)

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Recommended Content

JOIN TODAY
To unlock your recommendations.

Already have an account? Sign In

  • resilient flooring

    The 7 Types of Resilient Flooring

    The resilient flooring category is comprised of many...
    Resilient Flooring
    By: Resilient Floorcovering Institute
  • QuickDrain USA’s ShowerLine linear drain

    Tips for Curbless Shower Installation Using a Linear Drain

    Consider these four tips when planning for a curbless...
    Flooring Installation
    By: Darryl Jones
  • 2024 New Flooring Product Guide

    2024 New Flooring Products Guide

    We explore this year's introductions in area rugs,...
    Floor Coverings
    By: FLOOR Trends & Installation Editors
You must login or register in order to post a comment.

Report Abusive Comment

close

1 COMPLIMENTARY ARTICLE(S) LEFT

Unlock the future of flooring trends and installation techniques with FLOOR Trends & Installation.

REGISTER TODAY

Already a Registered User? Sign in now.

Manage My Account
  • eMagazine
  • eNewsletter
  • Online Registration
  • Manage My Preferences
  • Subscription Customer Service

What Shaw Flooring Network Dealers are Banking on for 2025

What Shaw Flooring Network Dealers are Banking on for 2025

Shaw Flooring Network Retailers Report Post-Election Sales Surge

Shaw Flooring Network Retailers Report Post-Election Sales Surge

SolidTech R: Sustainable, High-Performance Flooring from Bottle to Floor

SolidTech R: Sustainable, High-Performance Flooring from Bottle to Floor

Retailers Share Top Takeaways from Shaw Flooring Network Convention

Retailers Share Top Takeaways from Shaw Flooring Network Convention

More Videos

Sponsored Content

Sponsored Content is a special paid section where industry companies provide high quality, objective, non-commercial content around topics of interest to the FLOOR Trends & Installation audience. All Sponsored Content is supplied by the advertising company and any opinions expressed in this article are those of the author and not necessarily reflect the views of FLOOR Trends & Installation or its parent company, BNP Media. Interested in participating in our Sponsored Content section? Contact your local rep!

close
  • Woodura Herringbone 2.0
    Sponsored byBjelin

    The Herringbone Floor of the Future

Popular Stories

company branding

Branding and Marketing Strategies for Flooring Contractors

how to properly trowel adhesive

Flooring Adhesives Education: The Key to Preventing Costly Installation Failures

Woodura Herringbone 2.0

The Herringbone Floor of the Future


Download the Free Moisture Meters Guide

Events

December 1, 2030

Webinar Sponsorship Information

For webinar sponsorship information, visit www.bnpevents.com/webinars or email webinars@bnpmedia.com.

View All Submit An Event

Poll

Growth Challenges in the Flooring Industry

What’s holding you back from growth in 2025?
View Results Poll Archive

Products

2025 BNI Interiors Square Foot Costbook

2025 BNI Interiors Square Foot Costbook

See More Products

FLOORtalk podcasts - Listen Now

Related Articles

  • nahb-logo (1).jpg

    Lack of Existing Inventory Continues to Support Builder Sentiment

    See More
  • HBI and NAHB Release Construction Report

    Lack of Skilled Labor Limiting Home Construction Expansion, Inventory, Affordability

    See More
  • Home-Building-Supply-Chain-Disruptions.jpg

    Strong Demand Boosts Builder Confidence Despite Supply Chain Disruptions

    See More
×

We’re rolling out the red carpet of flooring knowledge!

Stay in the know on the latest flooring retail trends.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • eNewsletters
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing

search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
  • NEWS
    • Breaking Flooring News
    • eNewsletters
  • PRODUCTS
    • Carpet & Area Rugs
    • Hardwood
    • Installation Products
    • Installation Tools & Equipment
    • Laminate
    • Resilient
    • Specialty
    • Tile & Stone
  • A&D
  • INSTALLATION
  • MARKETS
    • Commercial
    • Residential
  • AWARDS
    • Installation Awards
    • Top Flooring Products
  • EDUCATION
    • Continuing Education
    • Webinars
    • Sponsored Insights
  • BUYER'S GUIDE
  • MEDIA
    • FLOOR Podcast
    • Videos
    • TISE 2025 Videos
    • eBooks
  • EMAGAZINE
    • eMagazine
    • Archive Issues
    • Contact
    • Advertise
  • SIGN UP