The National Association of Home Builders/Wells Fargo released data showing homebuilder confidence fell to 54 in May from 56 in April.
Economists polled by Thomson Reuters were expecting confidence to rise to 57.
The views on current sales of single-family homes helped lead the gauge down, MarketWatch reports, adding that builders are remaining upbeat as readings above 50 mean that home construction companies are optimistic about sales trends.
"Mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward," David Crowe, NAHB's chief economist told MarketWatch.
The home builders' confidence reading suggest that the economy is struggling to rebound strongly enough for the Fed to raise interest rates before September, Reuters reports.
Separately, TheStreet Ratings team rates D R HORTON INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate D R HORTON INC (DHI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."