The National Association of Home Builders (NAHB) released its housing market index for the U.S. on Tuesday. The NAHB housing market index fell to 61 in December from 62 in November, missing expectations for an increase to 63.

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

The fall was driven by a decline in all three components of the index. The buyer traffic sub-index decreased to 46 in December from 48 in November, the current sales conditions sub-index fell to 66 from 67, while the sub-index measuring sales expectations in the next six months dropped to 67 from 69.

"Overall, builders are optimistic about the housing market, although they are reporting concerns with the high price of lots and labour," the NAHB Chairman Tom Woods said.

"With job creation, economic growth and growing household formations, we anticipate the housing market to continue to pick up traction as we head into 2016," the NAHB Chief Economist David Crowe said.