Builder confidence in the new single-family home market in October fell five points to a level of 54 on the National Association of Home Builders Housing Market Index.
While any score of 50 or above means more than half of the builders surveyed have confidence in the market, the decrease comes after four months of increases. The HMI in September was at its highest (59) since the recession, so a drop is not atypical, said NAHB Chairman Kevin Kelly in a statement.
"After the HMI posted a nine-year high in September, it's not surprising to see the number drop in October," he said. "However, historically low mortgage interest rates, steady job gains and significant pent up demand all point to continued growth of the housing market."
The HMI's three components—builder perceptions of current sales, six-month sales and buyer traffic—all declined in October. The index gauging current sales dropped six points to 57. Future sales decreased three points to 64. Traffic of prospective buyers went down six points to 41.
All regions' HMI scores dropped except for the South, which rose two points to 58.
