Builders’ confidence in the housing market continued to grow in May, according to the NAHB/Wells Fargo Housing Market Index (HMI), which was released today with a reading of 16.

That represents a two-point increase over the previous month and reflects improvements in sales conditions now and for the next six months, according to builders surveyed by the NAHB. While sales traffic, the third component of the HMI, remained static at a reading of 13, both current sales (up two points to 14) and future sales (up three points to 27) gained ground.

The NAHB welcomed the news as a sign of hope that recovery may be on its way for the battered housing market. “The fact that the May HMI continued to tick up from April's five-point increase provides confirming evidence that the improved confidence level was no fluke,” said NAHB Chief Economist David Crowe in a statement. “This continued increase indicates that home builders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”

Alison Rice is senior editor, online, at BUILDER magazine.