Homebuilder confidence reaches seven-year high

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Homebuilder confidence in the market for single-family homes posted a five-point gain in November in the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) .

This marks the seventh consecutive monthly gain in the confidence gauge and brings it to the highest point since May 2006. The confidence index grew to 46 on the report’s gauge.

“While our confidence gauge has yet to breach the 50 mark — at which point an equal number of builders view sales conditions as good versus poor — we have certainly made substantial progress since this time last year, when the HMI stood at 19,” NAHB Chief Economist David Crowe said in a statement. “At this point, difficult appraisals and tight lending conditions for builders and buyers remain limiting factors for the burgeoning housing recovery, along with shortages of buildable lots that have begun popping up in certain markets.”

NAHB has been conducting the monthly survey of home builders for the past 25 years. The index gauges builer perceptions of current single-family home sales for the next six months as “good,” “fair,” or “poor” and the traffic of prospective buyers as “high to very high,” “average,” or “low to very low.”

All four regions of the country posted gains in their HMI three-month moving averages as of November, but the survey was conducted before Hurricane Sandy.
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