(Photo: REUTERS)
The National Association of Home Builders said Thursday home-builder sentiment fell in October, the latest in a string of bad signals for the U.S. housing market.
The index for new single-family homes declined by five points to a seasonally adjusted level of 54 in October, while U.S. home builders this month grew less confident about current sales conditions, expected future sales from buyers. .
A reading over 50 means most builders generally see positive conditions.
Economists surveyed by The Wall Street Journal expected the index would remain at that level in October.
October marked the index’s first decline since May, though it remained above the 50-point threshold for a fourth consecutive month.
“Historically low mortgage interest rates, steady job gains and significant pent-up demand all point to continued growth of the housing market,” said David Crowe, the NAR’s chief economist.
The index fell from September in all four regions of the country.
After a streak of strong growth in 2012 and the first half of 2013, the U.S. housing sector has hit turbulence over the last year, in part due to a jump last summer in mortgage rates. The Federal Reserve, in a policy statement last month, reiterated its concern about the “slow” housing recovery.
Sales of previously owned homes were down 5.3 percent in August from the year prior, a sector which makes up roughly 10 percent of the market.
Growth in construction of multifamily housing, such as apartment buildings, has outperformed construction of traditional single-family homes. Overall housing starts rose 8.6 percent in the first eight months of the year compared with 2013. However, new construction on single-family homes rose just 3.1 percent and according to the Commerce Department, new building permits for single-family homes were flat from a year earlier.
The NAHB index released Thursday only gauges home-builder confidence in the single-family market.
