The National Association of Home Builders’ Housing Market Index measures how confident home builders are in the market for newly built single-family homes. It’s based on a survey and scored so that any number above 50 indicates more builders view market conditions as good than poor. In May, the index scored a 45 – down from 51 in April. Robert Dietz, NAHB’s chief economist, says inflation was behind the decline. “A lack of progress reducing inflation pushed long-term interest rates higher in the first quarter and this is acting as a drag on builder sentiment,” Dietz said. “The last leg in the inflation fight is to reduce shelter inflation, and this can only occur if builders are able to construct more attainable, affordable housing.” According to the index, only the Midwest saw its three-month moving average improve in May, with a three point increase to 49. The Northeast is still the country’s most optimistic region, at 61. (source)