After reporting a sharp pullback in U.S. homebuilder confidence in the previous month, the National Association of Home Builders released a report on Monday unexpectedly showing a continued deterioration in confidence in the month of December.
The report said the NAHB/Wells Fargo Housing Market Index dropped to 56 in December after tumbling to 60 in November. Economists had expected the index to inch up to 61.
With the unexpected monthly decrease, the housing market index tumbled to its lowest level since hitting 54 in May of 2015.
"The fact that builder confidence dropped significantly in areas of the country with high home prices shows how the growing housing affordability crisis is hurting the market," said NAHB Chief Economist Robert Dietz.
He added, "This housing slowdown is an early indicator of economic softening, and it is important that builders manage supply-side costs to keep home prices competitive for buyers at different price points."
The unexpected drop by the housing market index reflected decreases by all of the component indexes, with the index measuring current sales conditions showing a notable six-point slump to 61 in December from 67 in November.
The component gauging expectations in the next six months also slid to 61 in December from 65 in November, while the metric charting buyer traffic edged down to 43 from 45.
"We are hearing from builders that consumer demand exists, but that customers are hesitating to make a purchase because of rising home costs," said NAHB Chairman Randy Noel. "However, recent declines in mortgage interest rates should help move the market forward in early 2019."
On Tuesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of November.
The material has been provided by InstaForex Company -
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