The National Association of Home Builders/Wells Fargo housing-market index fell to 55 in October, from 57 in September, the NAHB reported Wednesday. A prior September estimate pegged the level at 58, which matched the highest reading since 2005.
Results above 50 signal that builders, generally, are optimistic about sales trends.
“Interest rates remain near historic lows and we don’t expect the level of rates to have a major impact on sales and starts going forward,” said David Crowe, NAHB’s chief economist. “Once this government impasse is resolved, we expect builder and consumer optimism will bounce back.”
Despite the recent decline, pent-up demand is supporting builder sentiment, which has increased 34 per cent over the past year, outpacing home-construction growth.