The National Association of Home Builders released a report on Wednesday showing a bigger than expected decrease in U.S. homebuilder confidence in the month of March.
The report showed the NAHB/Wells Fargo Housing Market Index dropped to 79 in March from a downwardly revised 81 in February. Economists had expected the index to edge down to 81 from the 82 originally reported for the previous month.
The NAHB noted the index dropped below 80 for the first time since last September as increasing development and construction costs have taken a toll on builder confidence even as buyer demand remains relatively solid.
The bigger than expected decrease by the index came as the gauge measuring sales expectations in the next six months plunged to 70 in March from 80 in February.
The index gauging current sales conditions also fell to 86 in March from 89 in February, while the component charting traffic of prospective buyers rose to 67 from 65.
On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of February.
Housing starts are expected to jump by 3.2 percent to an annual rate of 1.690 million, while building permits are expected to slump by 2.4 percent to a rate of 1.850 million.