The NAHB survey of homebuilder sentiment fell for the 5th straight month in May to its lowest since June 2020… but has a long way to go to catch down to homebuyer sentiment…

Source: Bloomberg

All 3 of the underlying indices tumbled:

• Measure of present single family sales falls to 78
• Future single family sales gauge fell to 63 vs 73
• Prospective buyers traffic measure fell to 52 vs 61

“The housing market is facing growing challenges,” Robert Dietz, chief economist at the NAHB, said in a statement.

“Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates.”

By region, builder sentiment declined in all regions except the Northeast.