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First Cut: NAHB Housing Market Index climbs to 7-month high on solid sales

The NAHB/Wells Fargo Housing Market Index climbed to 66 in May from 63 in April and was the highest since 68 in October 2018 when rising mortgage interest rates choked off activity in the housing market.

The component for single-family home sales rose 3 points in May to 72, its highest since 74 in October 2018. Buyer traffic was up 2 points to 49, also its highest since October. Expected sales of single-family homes nudged up 1 point to 72, consistent with the past few months when declines in mortgage rates lifted prospects that homebuyers would return to the market.

It is probable that the April data on home starts and building permits issued will reflect the improved perceptions of conditions in the housing market when it is released at 8:30 ET on Thursday. The end of winter should help builders break ground on new construction and lack of supply in the existing home market could mean some potential buyers will turn to new construction to take advantage of relatively more affordable home ownership.

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