Builders' confidence in the market for new single-family homes slipped as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — remained at 54 in November, unchanged from a downwardly revised 54 in October, originally reported as 55.
Thomson Reuters' poll of economists predicted the index would be 55.
"Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road," according to NAHB Chairman Rick Judson. "Meanwhile, builders continue to face challenges related to rising construction costs and low appraisals."
"Policy and economic uncertainty is undermining consumer confidence," said NAHB Chief Economist David Crowe. "The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline."
Derived from a monthly survey that NAHB has been conducting for 25 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 stayed at 58, the sales expectations index for the next six months slid to 60 from 61; and the traffic of prospective buyers index declined to 42 from 43.