The National Association of Home Builders (NAHB)/Wells Fargo housing market index for October dropped five points to 54 from a reading of 59 in September. The reading was lower than a consensus forecast of 59 from a Bloomberg survey.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.

The current sales conditions sub-index fell six points in October to 57, and the sales expectations sub-index slipped to 64, down three points month-over-month. The sub-index that estimates prospective buyer traffic fell six points to 41. The buyer traffic sub-index has stayed below 50 for months now, and the lack of traffic has finally had an impact on the overall index, which had risen in each of the past four months.

The NAHB’s chief economist noted:

After the HMI posted a nine-year high in September, it’s not surprising to see the number drop in October. However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.

In the NAHB’s four regions, the three-month moving average index remained flat in two, rose in one and fell in one. In the South the index gained two points to post a 58 index score. The Northeast and Midwest regions remained flat at 41 and 59, respectively. In the West the index fell one point to 57.

We noted Wednesday morning that mortgage applications rose last week and mortgage loan rates also decreased. If mortgage rates continue to move lower, and credit requirements are eased, the hope is that more first-time buyers will enter the market.

ALSO READ: U.S. Home Price Increases Still Slowing

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.