Builders' confidence in the market for new single-family homes fell as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — dipped to 54 in May from 56 in April.
Thomson Reuters' poll of economists predicted the index would be 57.
"Despite this month's slight dip, builder confidence in the new home market remains above the 50-point benchmark," NAHB Chairman Tom Woods said. "Overall, the second quarter of 2015 is shaping up to be very solid."
"Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home," according to NAHB Chief Economist David Crowe. "On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward."
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 declined to 59 from 61, the sales expectations index for the next six months rose to 64 from 63; and the traffic of prospective buyers index slipped to 39 from 40.
