Builders' confidence in the market for new single-family homes was down marginally as the National Association of Home Builders' housing market index slid to 59 in July from 60 in June.
Thomson Reuters' poll of economists predicted the index would be 60.
"For the past six months, builder confidence has remained in a relatively narrow positive range that is consistent with the ongoing gradual housing recovery that is underway," NAHB Chairman Ed Brady said. "However, we are still hearing reports from our members of scattered softness in some markets, due largely to regulatory constraints and shortages of lots and labor."
"The economic fundamentals are in place for continued slow, steady growth in the housing market," according to NAHB Chief Economist Robert Dietz. "Job creation is solid, mortgage rates are at historic lows and household formations are rising. These factors should help to bring more buyers into the market as the year progresses."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index dipped to 63 from 64, the sales expectations index for the next six months fell to 66 from 69; and the traffic of prospective buyers index slipped to 45 from 46.
