NEW YORK Homebuilder sentiment rose in May as sales conditions improved, suggesting the housing market recovery still has momentum, data from the National Association of Home Builders showed on Wednesday.
The NAHB/Wells Fargo Housing Market index gained to 44 from a downwardly revised 41 in April, topping economists' forecasts for 43. Last month was originally reported as 42.
The gain put the sentiment measure closer to the 50 mark that indicates more builders view market conditions as favorable than poor.
While the index has not been above 50 since April 2006, it has improved along with the broader housing market and is up 16 points from a year ago.
The housing market began to turn around last year and tight inventory is expected to help keep prices rising.
"Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies," NAHB chairman Rick Judson said in a statement.
The single-family home sales component jumped to 48 from 44. The gauge of single-family sales expectations for the next six months rose to 53 from 52, while prospective buyer traffic increased to 33 from 30.
(Reporting by Leah Schnurr; Editing by James Dalgleish)