The National Association of Home Builders (NAHB)/Wells Fargo housing market index fell by two points from a downwardly revised 57 in September to 55 in October. The reading was lower than a forecast of 58 from Bloomberg and 57 from Dow Jones. An index reading below 50 indicates that more builders view sales conditions as poor than view them as good.
The current sales conditions subindex lost two points in October to come in at 58, and the sales sales expectations index came in at 62, also down two points. The subindex that estimates prospective buyer traffic also fell two points to come in at 44.
The NAHB chairman noted:
Builder optimism remains above 50 and we are still seeing signs of pent-up demand in many markets across the country. This slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots and uncertainty in Washington.
Rising home prices and mortgage loan rates continue to take a toll on home sales. This morning's report from the Mortgage Bankers Association on purchase applications showed a third straight decline in unadjusted purchase applications. The uncertainty caused by the federal government shutdown has caused significant declines in consumer confidence and, next to money, confidence in the nation's economy could be the most important factor in a home buying decision.