Builders’ confidence in the market for new single-family homes increased as the National Association of Home Builders' housing market index climbed to 74 in December from a downwardly revised 69 in November.

The December level was the highest since July 1999.

The November reading was originally reported as 70.

IFR's poll of economists predicted the index would be 70.

“Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community,” NAHB Chairman Granger MacDonald said.

The HMI measure of home buyer traffic rose eight points, showing that demand for housing is on the rise,” according to NAHB Chief Economist Robert Dietz. “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”

Derived from a monthly survey that NAHB has been conducting for 30 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.

The current single-family home sales index grew to 81 from 77, the sales expectations index for the next six months rose to 79 from 76; and the traffic of prospective buyers index climbed to 58 from 50.

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