The National Association of Home Builders/Wells Fargo builder sentiment index dipped to 56. That's down from December's reading of 57, which was revised one point lower from its initial estimate.
Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders' view of current sales conditions for single-family homes, their outlook for sales over the next six months and traffic by prospective buyers each declined since December.
Even so, the overall index is nine points higher than a year ago, reflecting a stronger U.S. housing market. The spring buying and selling season kicks off next month.