Homebuilder confidence in the U.S. improved for the eighth consecutive month in December, according to a report released by the National Association of Home Builders on Tuesday, with the housing market index rising to a new six-year high.
The report showed that the NAHB/Wells Fargo Housing Market Index climbed to 47 in December from a revised 45 in November. Economists had expected the index to edge up to 47 from the 46 originally reported for the previous month.
With the increase, the housing market index rose to its highest level since reaching a reading of 51 in April of 2006.
NAHB Chief Economist David Crowe said, "While there is still much room for improvement, the consistent upward trend in builder confidence over the past year is indicative of the gradual recovery that has been taking place in housing markets nationwide and that we expect to continue in 2013."
The modest increase by the housing market index came amid increases by two of the HMI's three component indexes.
The component gauging current sales expectations rose to 51 in December from 49 in November, while the component measuring traffic of prospective buyers inched up to 36 from 35.
While the component gauging sales expectations in the next six months slipped to 51 in December from 52 in November, it remained above the critical midpoint of 50.
NAHB Chairman Barry Rutenberg said, "Builders across the country are reporting some of the best sales conditions they've seen in more than five years, with more serious buyers coming forward and a shrinking number of vacant and foreclosed properties on the market."
"However, one thing that is still holding back potential home sales is the difficulty that many families are encountering in getting qualified for a mortgage due to today's overly stringent lending standards," Rutenberg added.
Wednesday morning, the Commerce Department is scheduled to release its report on new residential construction in the month of November.
Economists currently expect housing starts to drop to an annual rate of 865,000 in November from 894,000 in October.
by RTT Staff Writer
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