Optimism the market for new, single-family homes was up for the fourth straight month in January, according to a report from the National Association of Home Builders.
The NAHB-Wells Fargo Housing Market Index rose four points
to 25 - its highest level since June 2007.
"Builder confidence has now risen four months in a row,
with the latest uptick being universally represented across every index
component and region," said Bob Nielsen, chairman of the NAHB and a home
builder from Reno, Nev. "This good news comes on the heels of several
months of gains in single-family housing starts and sales, and is yet another
indication of the gradual but steady improvement that is beginning to take hold
in an increasing number of housing markets nationwide - and that has been shown
by our improving markets index. Policymakers must now take every precaution to
avoid derailing this nascent recovery."
The index is made up of the results from a survey the
NAHB has been conducting for 20 years. It measures perceptions of the current
market and expectations for the next six months, asking participants to rate
conditions "good," "fair" or "poor.” Builders are also
asked to rate prospective buyer traffic as "high to very high," "average"
or "low to very low."
Averaged into a seasonally adjusted index, a number over
50 indicates a majority view economic conditions as positive.
"Builders are seeing greater interest among
potential buyers as employment and consumer confidence slowly improve in a
growing number of markets, and this has helped to move the confidence gauge up
from near-historic lows in the first half of 2011," said NAHB chief economist
David Crowe. "That said, caution remains the word of the day as many
builders continue to voice concerns about potential clients being unable to
qualify for an affordable mortgage, appraisals coming through below
construction cost, and the continuing flow of foreclosed properties hitting the
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