Faith in the market for new, single-family homes declined to its lowest level since February, according to aNational Association of Home Builders survey.

Faith in the market for new, single-family homes declined to its lowest level since February, according to results of a National Association of Home Builders survey.

The NAHB/Wells Fargo Housing Market Index for June dropped five points to 17.

"The home buyer tax credit did its job in stoking spring sales and we expected a temporary pull back in the builders' outlook after the credit expired at the end of April," said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, the reduction in consumer activity may have been more dramatic than some builders had anticipated, which resulted in their lower confidence levels."

The 20-year-old NAHB index gauges builder perceptions of the market for the next six months, asking builders to rate expectations as “good,” “fair” or “poor.” It also surveys homebuilders about customer traffic rates. A number above 50 indicates positive feelings about the U.S. housing market.

Despite the index’s drop, there are still some reasons for optimism, said association chief economist David Crowe.

"We expected some softening in the market following the expiration of the home buyer tax credit and this report seems to verify this assumption," Crowe said. "In the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward. But as today's HMI data shows, builders still remain very cautious and are aware that several factors could impede the nascent housing recovery, including serious problems in obtaining financing for the production of housing, faulty appraisal practices and competition from short sales and foreclosed properties."