The NAHB Housing Market Index, which measures builder confidence, rose 5 points in May and is finally getting back to the breakeven of 50 – which is the level between expansion and contraction. Confidence has risen for five straight months and is at the highest level it’s been at since July 2022. The estimate was for no change, so this was much stronger than expectations. Looking at the internals: -Present Situation was up 5 points to 56 -Future Outlook was higher by 7 pts to 57 -Buyer Traffic rose 2 points to 33, but still well below 50. Even when the housing market was very strong in May of 2022, Buyer Traffic was only at 53. And traffic has made a big recovery from 20 in November of last year. Home builders are feeling a bit more confident because there are no existing homes for sale and they are taking market share. Builders also are gaining share from the existing market because of the incentives they are utilizing. The NAHB said 54% of builders offered some type of incentive to help lift sales, though that is down from 59% in April and the recent peak of 62% in December. They also said 27% are reducing prices but that is down from 30% in April and 36% last November. With the incentives starting to go away, it speaks to strength in the new construction market.