Confidence among homebuilders cooled in October from an 11-month high, reflecting a pause in the market for single-family houses, according to data from the National Association of Home Builders/Wells Fargo.
The builder sentiment gauge dropped to 63 (matching the forecast) from the prior month's 65 that was the highest since October 2015; readings greater than 50 mean more respondents reported good market conditions. The index of prospective buyer traffic fell to 46 from 47, while the measure of the six-month sales outlook rose to 72, the highest in a year, from 71. The gauge of current sales decreased to 69 from an almost 11-year high of 71.
Developers' sentiment may have been restrained by factors including the limited availability of ready-for-building lots and skilled workers. At the same time, mortgage rates still close to historically low levels and a healthy job market will help keep the housing rebound on track.
The report "represents a mild pullback from a jump in September," NAHB chief economist Robert Dietz said in a statement. "The housing market continues to make slow and steady gains."
Builder confidence climbed in two of four regions. It decreased eight points in the West to 74, slipped four points in the South to 64. Sentiment rose four points in the Northeast to 46, two points in the Midwest to 59.