Homebuilder sentiment dropped in November

Homebuilder sentiment unexpectedly fell, as the National Association of Homebuilders housing-market index came in at 62.

Economists had estimated that the index for November stayed unchanged month-on-month at 64. The prior month's print was revised up to a ten-year high of 65.

The index is designed to gauge the current sentiment and six-month outlook of NAHB members on market conditions for new home sales.

Bank of America Merrill Lynch economists had forecast that the index was due for a pullback after reaching a cycle high.

"The index has overshot relative to the official data on new home sales and mortgage applications, so we aren't surprised at this dip, which we view as a correction rather than the start of a sustained deterioration," wrote Pantheon Macroeconomics' Ian Shepherdson to clients.

He included this chart, which shows that the homebuilder index is still consistent with rising new home sales.

NAHB (1)

(Pantheon Macroeconomics)

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