"While builders remain optimistic, we are seeing the numbers settling back into a normal range," said NAHB Chairman Granger MacDonald, a builder and developer from Kerrville, Texas. "Regulatory burdens remain a major challenge to our industry, and NAHB looks forward to working with the new Congress and administration to help alleviate some of the pressures that are holding small businesses back and making homes less affordable."

NAHB chief economist Robert Dietz said the number of perspective buyers dropped slightly during the month.

"With much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages," Dietz said. "Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed."