NAHB Index Rise Indicates Better Builder Confidence

Washington, D.C.–Builder confidence in the single-family home market rose in February, according to the National Association of Home BuildersWells Fargo Housing Market Index (HMI) released Tuesday afternoon.The index–which hit an all-time low of 18 in December 2007–increased a point to 20 in February. A reading above 50 indicates that more builders view sales conditions as good rather than poor.The sales expectations index, which forecasts builders’ expectations for the next six months, rose five points to 19–the highest level since July 2007. Three regions saw HMI increases this month–the Northeast, which rose three points to 24; the South, which rose two points to 24 and the West, which gained two points and reached 15. Model home traffic also increased.NAHB Chief Economist David Seiders said that more homebuyers are researching  home purchases. “While builders remain very cautious about the outlook for new home sales, given today’s economic environment, the fact that more consumers appear to be checking out their options is a good sign,” said newly elected NAHB president Sandy Dunn.The NAHB/Wells Fargo index measures builder perceptions of current single-family home sales and expectations for the next six months and asks builders to rate prospective buyer activity.