The spring selling season has so far failed to inspire confidence among builders that the moribund new-home market is going to get better anytime soon.

The National Association of Home Builders Monday reported that the NAHB/Wells Fargo Housing Market Index (HMI) for April slipped back a point from March to a reading of 16, where it has been for five of the past six months. Wall Street was expecting a reading of 17.

Two of three HMI component indices also dropped: the component gauging current sales conditions fell one point to 16 and the measure of sales expectations for the next six months declined three points to 23, its lowest mark since last October. The index gauging traffic of prospective buyers rose one point to 13 in April, its highest level since last June.

A reading between 50 and 100 indicates optimism; below 50 indicates negativity.

Regionally, the HMI in the South, the largest region, dropped four points to 15. The Northeast and Midwest registered two-point gains to 20 and 14, respectively, and the West remained flat with March at 17.

"The spring home buying season is getting off to a slow start due to persistent concerns about home values as more foreclosures seem to be hitting the market, increasingly restrictive lending requirements for home buyers and builders, and the slow pace of economic recovery,"said David Crowe, NAHB chief economist. "While pockets of improving activity are appearing in some markets, the best sales activity appears to be happening in the lower price ranges, where first-time buyers have greater flexibility than repeat buyers who must sell their current home."

NAHB Chairman Bob Nielsen, a builder from Reno, Nev., added, "While builders in some areas are starting to see a pickup in traffic of prospective home buyers, many consumers remain skittish about the health of the housing market and overall economy, particularly in view of recent legislative and regulatory proposals that could make it much harder to get a mortgage."

"David Goldberg, home building analyst at UBS, was not surprised by the decline. In a research alert, he wrote, "This is in line with our call that the selling season is coming in below expectations, as we expect the index to remain constrained over the next few months, as tighter underwriting standards, tougher comps, and depressed confidence might limit any potential bounce."

Adam Rudiger at Wells Fargo was slightly more upbeat: "While builder commentary and our monthly "Neighborhood Watch" survey are showing sequentially stronger sales, for each month of 2011, the HMI paints a more negative picture, which we attribute to seasonal adjustments (our survey is not adjusted)." However, he added, "The improvement in the housing market appears to be purely seasonal with no permanent improvement to demand evident yet."