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Homebuilder sentiment from the National Association of Home Builders (NAHB) was updated this morning. As expected, the headline index rose from 44 in March to 45. Of the sub-indices, increases in both present and future sales drove the headline reading higher.

While those readings remain relatively muted versus most of the past decade, it reiterates the modest improvement in sentiment we have seen this year. In fact, and as shown in the second chart below, homebuilder sentiment’s improvement over the past four months marks the longest streak of back-to-back increases since another streak lasting for four months that ended in December 2021.

As for the regional breakdown, sentiment in the Northeast and South were both unchanged versus last month, which leaves the indices in the middle of their historical ranges. The Midwest saw more substantial improvement, rising by 3 points to the highest level since September. The West experienced an even more substantial increase of five points. That month-over-month increase ranks in the 85th percentile of all moves on record for that sub-index.

Although the NAHB’s reading on homebuilders has improved over the past few months, homebuilder stocks, as proxied by the SPDR S&P Homebuilder ETF (XHB), have been trending lower since February. Recently, XHB has run up to its 50-DMA (which has begun to roll over), and the downtrend line off the aforementioned early February high. So far, XHB has failed to break out.

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