Spring has continued to prove a bust for builders in May. The index measuring builder confidence in the market for newly built, single-family homes remained stuck at a level of 16 in May, not moving from the doldrums where it has spent six of the past seven months, the National Association of Home Builders said Monday. The Wall Street consensus estimate was a reading of 17.

Meanwhile, small increases in the indices measuring current sales conditions and traffic, each up a point to 16 and 14 respectively, were insufficient to outweigh a two-point drop to 20 in expectations for the next six months. In the NAHB/Wells Fargo Index, a reading below 50 indicates a negative outlook.

"The HMI component index measuring traffic of prospective buyers increased by one point for the second time this year as prospective buyers show growing interest but remain extremely hesitant due to a number of factors,"said David Crowe, NAHB chief economist. "Asked to identify reasons that potential customers are holding back at this time, 90% of builders surveyed said clients are concerned about being able to sell their existing home at a favorable price, while 73% said consumers think it will be difficult for them to get financing. Clearly, access to credit for both builders and buyers remains a considerable obstacle to the revival of the new-homes market."

Regionally, the HMI in the Northeast fell 5 points to 15, the Midwest remained flat at 14, the South was up one point to 16, and the West dropped two points to 16.

David Goldberg, home building analyst at UBS, said in a research note, "We expect builder sentiment to remain depressed over the near term, following the weaker than expected spring selling season." He added, "We'd note that measures of sentiment are particularly subjective and don't necessarily provide accurate forecasts of future conditions" but said, "readings on traffic remain well below the historical average; we don't expect a significant improvement until home prices and the broad economy show signs of stabilization, leading to improved buyer confidence."

In his note, Adam Rudiger at Wells Fargo wrote, "The 'Single-Family Sales: Next 6 Months' component of the index was consistently in the 25-26 range in the November -- March timeframe, but has since declined for three consecutive months and now sits at 20. As we entered 2011, we believe builders were optimistic that an improved spring selling season might lead to growth for the industry in 2011. However, as the spring disappointed, these expectations likely moderated, which we believe is what the HMI showed this month."