Home builders' confidence in the market for new, single-family homes rose to the highest level seen since April 2006 this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The index rose two points in December, its eighth consecutive monthly gain, to reach a reading of 47.
“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,” said Barry Rutenberg, the NAHB’s chairman, while adding that tight lending conditions still pose challenges to many would-be buyers.
The index—for which any reading above 50 indicates that a majority of builders see conditions as “good” rather than “poor”—saw two of its three components register readings above that midpoint in December. The component measuring current sales conditions was up two points to a reading of 51, and the measure of sales expectations for the next six months fell one point to 51. The component measuring traffic of prospective buyers was up one point to 36.
Claire Easley is a senior editor at Builder.