After four consecutive months of gains, builder confidence in the new-home single-family market is slipping. The drop follows a nine-year high reached last month in the National Association of Home Builders/Wells Fargo Housing Market Index, which gauges builder perceptions on single-family home sales, sales expectations for the next six months, and prospective buyer traffic.

All three components on the index fell in October, with prospective buyer traffic and current sales conditions dropping by six points.

"We are seeing a return to the mid-50s index level trend established earlier in the summer, which is in line with the gradual pace of the housing recovery," says NAHB Chairman Kevin Kelly. Any number on the index above 50 indicates that more builders view conditions as good than poor. "While there was a dip this month, builders are still positive about the housing market."

NAHB Chief Economist David Crowe says with historically low mortgage interest rates, steady job gains, and “significant” pent-up demand, the new-home market should be poised for continued growth in the coming months.

Source: National Association of Home Builders Eye on Housing Blog