Builder confidence had been on a tear recently, but new data from the NAHB suggests a cooling off period.

Builder confidence for the newly built, single-family home market stumbled a bit in October, with the National Association of Home Builders’ (NAHB) Housing Market Index falling two points from September to a reading of 55.

That comes after a number of months of positive readings for the Housing Market Index, and signifies that though builder confidence is still in positive territory, it could be entering a slowdown.

Housing Market Index in October

Derived from a monthly survey that the NAHB has been conducting for 25 years, the Housing Market Index gauges builder perceptions on several facets of the new single-family home market, with any number over 50 indicating that more builders view conditions as good than poor. October’s readings included:

• All three of the Housing Market Index’s components declined two points in October.
• The component gauging current sales conditions fell to 58; the component gauging sales expectations in the next six months posted a reading of 62; and the component gauging traffic of prospective buyers was 44.
• In addition, the index also computed three-month moving averages for the nation’s regions: the South held steady at 56;, the West declined a single point to 60; the Northeast fell three points to 38; and best of all, the Midwest posted a one-point gain to 64.

Interestingly, the consistent performance in the South matches the sentiments of Danny Hertzberg, a Realtor with The Jills Group in Miami, who has seen his clients respond very favorable to the area’s new construction offerings.

“There are many new construction opportunities, from single-family to condos,” Hertzberg said. “So if somebody has been in a property for a long time … they are taking the opportunity to go to the newer, more modern projects that are coming up”

Interested in how the Housing Market Index has progressed the last year? Check out our sweet graph below for an idea: