The December decline took the sentiment index to the lowest since May 2015 and missed the Econoday forecast of a one-point increase. It followed a breathtaking plunge from October to November and brought the full-year 2018 average for the index to 67, one point lower than 2017.
In December, the index component measuring current sales conditions fell six points to 61, and the gauge of sales expectations over the next six months dropped four points, also to 61. The buyer traffic tracker fell two points to 43, its lowest level since March 2016.
Any reading over 50 signals improvement.
NAHB’s index is often seen as an early read on new-home construction and sales. Indeed, the November sentiment plunge was followed by a new-home sales report that was the lowest in nearly three years.