Confidence among US homebuilders continues to slip from its decade high as developers worry about the rising costs of labor and lots.

The National Association of Home Builders/Wells Fargo sentiment gauge fell to 61 in December, down from November's 62.

Despite the drop-off, conditions remain uplifting; readings over 50 indicate positive conditions, Bloomberg reports. The gauge peaked at 65 in October, a 10-year high.

“Housing had a very strong start to the year, but the momentum has softened a bit in recent months,” Thomas Costerg, a senior US economist at Standard Chartered Bank in NYC says. “The low-hanging fruit are probably gone.”

While many builders remain optimistic, they are growing increasingly concerned about the cost of doing business. And as the US central bank considers raising interest rates, consumers and builders may hold off on investments until the impact of higher borrowing costs becomes clear. [Bloomberg]