Homebuilder Confidence Index Numbers: The Good And Bad

The headline Homebuilder Confidence Index (HMI) ticked up this month from 44 in May 2013 to 45 this year. All three sub-indices (present conditions, traffic, six-month outlook) were also up year-on-year, but only six-month outlook has increased sequentially and the National Association of Homebuilders (which compiles the index) sees reason for concern.

“May's confidence index is a win for the bears,” write Sterne Agee analysts Jay McCanless and Annie Worthman in a May 15 report. “We believe there are reasons to remain positive on the housing sector, but tepid macroeconomic data thus far in 2014 along with nagging questions about affordability...