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Builders regaining confidence slowly

November 17, 2010 - The nation's construction industry has grown slightly more optimistic about the state of the housing market after noting a rise in the quality of buyers moving into new homes.

A report from the National Association of Home Builders said that builders are encountering more buyers that are serious about moving into new homes in the near future. That allowed the group's housing market index to rise to a reading of 16 in November, up from 15 a month earlier. It was the second straight month that builder confidence rose, though it remains very depressed - readings below 50 indicate more builders are pessimistic regarding housing.

Future expectations had a particularly strong showing, growing to a reading of 25 this month, up two points from October. "This is the highest that component of the HMI has been since the homebuyer tax credit program spurred sales activity this spring," said NAHB chief economist David Crowe.

Crowe added that many builders are still struggling to find financing for their projects from a tightened lending community, a potential obstacle to further improvements.

The report fell in line with the cautious optimism being felt among officials in other sectors of the real estate market. Officials with the National Association of Realtors recently reported that many real estate agents around the country see reasons to be positive about the future of housing, including low mortgage rates and high affordability.
 

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