The NAHB/Wells Fargo Housing Market Index (HMI), which measures homebuilder sentiment, currently stands at 67, a two-point drop month over month. However, the reading represents an effective increase of six points year-over-year, according to a USA Today report.
The index monitoring current sales conditions dropped three points to 72; the index measuring sales expectations for the next six months saw a two-point drop to 76; and buyer traffic is down one point to 51.
But builders still have a reason to be enthusiastic in spite of the sentiment index weakening, said NAHB Chairman Granger MacDonald.
"Builders begin the year optimistic that a new Congress and administration will help create a better climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process," MacDonald said.
Builder confidence went up fast after the election, but now higher costs and slow-moving regulatory reform have combined to stifle it somewhat.
"NAHB expects solid 10 percent growth in single-family construction in 2017, adding to the gains of 2016," said NAHB Chief Economist Robert Dietz. "Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor."
Homebuilder sentiment edges down
Homebuilder confidence highest since 2005
Homebuilder confidence faltered a bit this month as the post-election boost wore off, according to new data from the National Association of Home Builders. However, builder confidence is still higher than it was a year ago.