The National Association of Home Builders (NAHB) released its housing market index for the U.S. on Monday. The NAHB housing market index declined to 54 in May from 56 in April.

Analysts had expected the index to rise to 57.

The decline was driven by lower sales and slower buyer traffic.

A level above 50.0 is considered positive, below indicates a negative outlook.

The NAHB Chairman Tom Woods said that the second quarter is expected to be solid.

"Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home," the NAHB Chief Economist David Crowe noted.

He added that as the subindex measuring future sales expectations has been increased all year, mortgage rates remain low, and house prices are affordable, all these factors "should spur the release of pent-up demand moving forward".