WASHINGTON - U.S. confidence in new home construction hit a six-year high, rising to an index level of 47 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
"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," NAHB Chairman Barry Rutenberg, a home builder from Gainesville, FL, said in a statement. "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."
"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," added NAHB Chief Economist David Crowe.
An HMI below 50 indicates more builders still view market conditions as less than favorable. However an encouraging sign, NAHB reports, are that two of the three components used to develop December's HMI are now above 50: current sales expectations rose 2 points to 51, and sales expectations for the next six months is at 51. The group says the component measuring traffic of prospective buyers increased 1 point, to 36.
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