By Xavier Fontdegloria

Home-builder confidence in the U.S. remained unchanged in May supported by low inventories and strong demand, even as rising prices and limited availability of most building materials added to the cost of new homes, according to a measure released Monday from the National Association of Home Builders. Here are the report's main takeaways:

--The association's housing market index, which gauges the single-family housing market, stood at 83 in May, unchanged from April. A number above 50 indicates that more builders view conditions as good than poor.

--The reading matches economists' forecasts from The Wall Street Journal poll.

--The indicator remains at robust levels after reaching an all-time high of 90 in November 2020.

--"Builder confidence in the market remains strong due to a lack of resale inventory, low mortgage interest rates, and a growing demographic of prospective home buyers," NAHB Chairman Chuck Fowke said. However, first-time and first-generation home buyers are particularly at risk for losing a purchase due to cost increases associated with increasingly scarce material availability, he said.

--"Some builders are slowing sales to manage their own supply-chains, which means growing affordability challenges for a market in critical need of more inventory," NAHB Chief Economist Robert Dietz said. Home buyers should expect rising prices throughout 2021 as the cost of materials, land and labor continue to rise, he said.

--The HMI indexes posted mixed figures in May compared with the previous month. The index gauging current sales conditions held steady at 88, the component measuring sales expectations in the next six months rose one point to 81, and the measure charting traffic of prospective buyers fell one point to 73.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

 

(END) Dow Jones Newswires

May 17, 2021 10:14 ET (14:14 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.