Confidence among builders of new, single-family homes edged up for a third consecutive month in December.
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence rose two points from a downwardly revised number to 21, bringing the index to its highest point since May 2010.
"While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," says Bob Nielsen, chairman of the NAHB. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."
December was the first time since mid-2009 that home builder confidence improved for three months in a row, according to NAHB Chief Economist David Crowe.
"While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months," Crowe says.
Each of the HMI's three component indices registered a third consecutive month of improvement in December. The component gauging current sales conditions rose two points in the latest month to 22, while the component gauging sales expectations in the next six months edged up one point to 26. The component gauging traffic of prospective buyers gained three points to 18, which is its highest level since May 2008.