Homebuilder confidence in the U.S. unexpectedly improved in the month of May, according to a report released by the National Association of Home Builders on Tuesday.
The report said the NAHB/Wells Fargo Housing Market Index rose to 70 in May from a downwardly revised 68 in April. Economists had expected the index to come in unchanged compared to the 69 originally reported for the previous month.
NAHB Chairman Randy Noel said, "The solid May report shows that builders are buoyed by growing consumer demand for single-family homes."
"However, the record high cost of lumber is hurting builders' bottom lines and making it more difficult to produce competitively priced houses for newcomers to the market," he added.
The unexpected increase by the headline index came as the index gauging current sales conditions climbed to 76 in May from 74 in April.
Meanwhile, the indexes measuring buyer traffic and expectations in the next six months remained unchanged at 51 and 77, respectively.
The Commerce Department is scheduled to release a separate report on new residential construction in the month of April on Wednesday.
Housing starts are expected to drop to an annual rate of 1.310 million in April after climbing to a rate of 1.319 million in March.
by P2PNews Staff Writer