Updated from 11:54 a.m.

Consumer confidence continued to build in May, although at a more moderate pace than last month. Separately, sales of new and preowned homes easily surpassed economists' expectations in April.

The Conference Board's monthly index of consumer confidence edged up to 83.8 in May from 81 in April, as consumers reported a more conservative near-term outlook after a burst of optimism a month ago.

"The postwar euphoria experienced last month has quickly given way, and consumers' focus has returned to matters on the home front," said Lynn Franco, director of research at the Conference Board.

According to the survey, consumers' assessment of present conditions was less favorable than in April. The present situation subindex, which measures current attitudes, fell to 67.9 from 75.2, as labor market conditions remained a concern. Consumers who reported that jobs are hard to get jumped to 32.6% from 29.4%. Those claiming jobs are plentiful slipped to 12.6% from 13.0%.

"We got a bounce in confidence postwar," said Josh Feinman, an economist at Deutsche Asset Management. "But there remain concerns about labor market developments. Some of the real drop in confidence has lifted, which is encouraging. The economic turnaround is materializing slowly."

Consumers' views for the future were more optimistic. The expectations subindex, which gauges a six-month outlook, rose to 94.4 from 84.8. The longer-term employment outlook was also better.

Separately, sales of preowned homes increased 5.6% in April, marking the first increase since January. Existing home sales rose to an annualized 5.84 million units from 5.53 units in March, the National Association of Realtors said. Economists had estimated a rate of 5.67 million homes annually.

New home sales rose 1.7% to an annual rate of 1.028 million, beating estimates for a rate of 986,000.

"With the worst of the winter weather behind us, with housing affordability at elevated levels improved by another wave of mortgage-rate declines, and with a tax cut in place, the housing sector should be a source of strength for the economy in late summer and into the second half of the year," said Peter Kretzmer, an economist at Banc of America Securities, in a research note.

Homebuilder shares were higher on the news, with Hovnanian Enterprises ( HOV) approaching its 52-week high. It was up 88 cents, or 1.8%, at $50.43. Toll Brothers ( TOL) was ahead 2 cents, or 0.7%, at $27.55, while Pulte Homes ( PHM) was up 90 cents, or 1.41%, at $64.61.