Looks like the stock market party ended quickly. After briefly passing the 16,000 mark early in the trading day, the Dow industrials have fallen as homebuilder sentiment missed expectations.
National Association of Homebuilders data released Monday morning found builder sentiment remained at 54 this month, equal to last month's downwardly revised reading and a point lower than economists had expected. A reading greater than 50 on the survey indicates that more builders see positive market trends versus negative.
November's reading is the lowest result of builder confidence in four months -- matching the revised low for October. Nonetheless, NAHB touted the results as the sixth straight month of positive sentiment, but also issued caution on the road ahead.
“Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road,” said NAHB Chairman Rick Judson.
“Meanwhile, builders continue to face challenges related to rising construction costs and low appraisals.”
“Policy and economic uncertainty is undermining consumer confidence,” said NAHB Chief Economist David Crowe. “The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.”
The NAHB/Wells Fargo housing marketing index has increased 20% during the past year, as many U.S. housing markets saw recovery during 2013.