NAHB Housing Index Jumps to 58 in December

Builders' confidence in the market for new single-family homes rose as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — climbed to 58 in December from an unrevised 54 in November.

Thomson Reuters' poll of economists predicted the index would be 55.

"This is definitely an encouraging sign as we move into 2014," according to NAHB Chairman Rick Judson. "The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months. This indicates that an increasing number of builders have a positive view on where the industry is going."

"The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels," said NAHB Chief Economist David Crowe. "Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead."

Derived from a monthly survey that NAHB has been conducting for 25 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 surged to 64 from 58, the sales expectations index for the next six months rose to 62 from 60; and the traffic of prospective buyers index increased to 44 from 41.

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