Homebuilder sentiment fell more than expected in May.
The National Association of Homebuilders' index fell to 54 last month.
Economists had forecast a rise to 57 from 56 the previous month, according to Bloomberg.
The association noted that despite the drop, the index is still above the 50-point benchmark.
“Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” said NAHB chief economist David Crowe in the release. “On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.”
Ahead of the release, Raymond James' chief economist Scott Brown wrote in a weekly note that strong jobs growth over the past year and low mortgage rates have been supportive of the housing market.
There's much more housing data on tap this week. On Tuesday morning, we'll get April Housing Starts and Building Permits, followed by numbers on Mortgage Applications on Wednesday and Existing Home Sales on Thursday.
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