U.S. homebuilder sentiment slipped in June, a private survey showed on Monday, as higher mortgage rates and an ongoing credit crunch damped expectations for the sector.
The National Association of Home Builders/Wells Fargo Housing Index slipped to 15 from 16 in May. Analysts had expected the index to climb by one point.
The deep slump in the U.S. housing market has shown some signs of abating. However, the NAHB said consumer anxiety over jobs and the economy's health has created an uncertain picture for the sector's recovery.
Home builders are facing a few headwinds, including expiration of the tax credit at the end of November; a recent upturn in interest rates; and especially the continuing lack of credit for housing production loans, Joe Robson, the chairman of the trade association, said in a statement.
Earlier this year, Congress authorized an $8,000 tax credit for first-time home buyers and home builders have called for that credit to be expanded beyond this year.
While rates on 30-year mortgages touched record lows in April, they have climbed since then on hints the U.S. recession, now in its 18th month, may be drawing to a close.
Rates on 30-year mortgages rates, which touched a low of 4.78 percent in April, reached 5.59 percent last week, the highest level since November, according to mortgage finance company Freddie Mac.
On a bright note, the swollen stock of new homes has been shrinking. In April, the inventory of homes available for sale fell 4.2 percent to 297,000, or the lowest level since May 2001. New data will be available on Tuesday.
The overall housing market has been crippled since a five-year boom turned into a record number of defaults in 2006.
Many homeowners have rushed to refinance, and potential buyers have been nudged off the fence by the low mortgage rates of recent months but that spree is coming to an end.
An index of mortgage activity fell to a four-month low in early June as climbing rates turned consumers away, the Mortgage Bankers Association said.
(Editing by Kenneth Barry)