Well, it could’ve been worse.

The first of this week’s sparse US macro data offered a better-than-expected read on homebuilder moods, which improved at the margins in May.

The NAHB’s gauge managed 37 on the headline, up from April and slightly better than expected. But as the figure below reminds you, this remains an overtly dour picture.

The marquee measure of homebuilder sentiment has managed just a handful of optimistic prints since 2022.

Headed into this year, everyone involved in US housing — from builders to buyers to sellers to agents — tentatively expected the market to turn a corner. Rates were lower, the Trump administration was pivoting hard to affordability with a specific focus on housing and so on.

Alas, the war with Iran undercut the spring buying season, as financing costs rose in tandem with the oil-driven increase in US Treasury yields, while rekindled macro uncertainty cast a pall over a positive inflection in hiring momentum.

“The housing market remains soft as higher mortgage rates, rising gas prices and economic uncertainty related to the war in Iran continue to dampen buyer demand,” NAHB Chairman Bill Owens sighed on Monday.

The association’s forward-looking gauge of single-family sales likewise picked up from April, but as the figure shows, it too remains subdued.

Weighing in, long-time NAHB chief economist Robert Dietz said that while “some regional markets, including parts of the Midwest, are showing relative strength, the housing market continues to face significant affordability challenges.”

Around a third of builders cut prices in May and the prevalence of sales incentives remained 60% or higher for the 14th straight month. (Maybe they should all pivot to data center construction. “We’re AI companies now!”)

On the bright side — and ahead of Tuesday’s NAR update for April — Redfin said pending home sales rose nearly 10% in the four weeks to May 10, to the best levels since 2022.