Builders' confidence in the market for new single-family homes increased for the eighth straight month as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment - rose to 47 in December from a downwardly revised 45 in November.
November's index was originally reported as 46.
Thomson Reuters' poll of economists predicted the index would grow to 47.
"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," according to NAHB Chairman Barry Rutenberg. "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," said NAHB Chief Economist David Crowe.
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
Two component indexes increased in December while one was down. The current single-family home sales index jumped to 51 from 49, the sales expectations index for the next six months slid to 51 from 52, and the traffic of prospective buyers index rose to 36 from 35.