The NAHB Housing Market Index unexpectedly fell to 54 in October from 59 in September.
Economists estimated this measure of homebuilder sentiment would be unchanged at 59.
“While there was a dip this month, builders are still positive about the housing market,” NAHB Chief Economist David Crowe said. “After the HMI posted a nine-year high in September, it’s not surprising to see the number drop in October. However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.”