NEW YORK Homebuilder sentiment slipped slightly in October on policy gridlock in Washington and higher labor costs, the National Association of Home Builders said on Wednesday.
The NAHB/Wells Fargo Housing Market Index dropped to 55 in October, the lowest since June, the group said in a statement. The September reading was initially reported at 58 but was revised lower to 57 on Wednesday.
Economists polled by Reuters had predicted the index would remain flat at 58 in October.
"This slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots and uncertainty in Washington," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.
Readings below 50 mean more builders view market conditions as poor than favorable.
The U.S. federal government shutdown has weighed on home buying, with mortgage applications for purchase dipping in the most recent week, according to the Mortgage Bankers Association.
In addition, borrowing costs for home buyers have jumped recently.
Rates for 30-year mortgages have risen well over 100 basis points since May on speculation the U.S. Federal Reserve will soon taper its $85-billion-per-month in buying of Treasuries and mortgage-backed securities.
The survey's index on homebuilders' views on current sales conditions fell to 58 from a downwardly revised 60 in the previous month, the industry group said.
The gauge of expectations for single-family home sales for the next six months also dipped, down to 62 from 64 in September, initially reported as 65. The component on prospective buyer traffic decreased to 44 from a revised 46, originally reported as 47.
(Reporting by Luciana Lopez; Editing by Meredith Mazzilli)