Homebuilder confidence was up in December for the third consecutive month, according to the National Association of Home Builders (NAHB) and Wells Fargo.
The Housing Market Index was up to 21 from 19 in November, the highest point since May 2010, but below the 50 point mark, the threshold where the majority of builders view conditions positively.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” said Bob Nielsen, chairman of the NAHB, in a statement. “However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving.”
The survey is based on responses from builders, who rate current sales perceptions and expectations for sales in the next six months as good, fair or poor. Builders also rate traffic of prospective buyers as high to very high, average, or low to very low.
In December, measure of current sales conditions rose two points to 22, expected sales increased one point to 26, and prospective buyer traffic rose three points to 18, the highest level since May 2008.
“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said David Crowe, NAHB's chief economist, in a statement. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”
In the south, builder confidence rose four points to 25, the highest level since March 2008. The west increased one point 16, the midwest was flat at 24 and the northeast was down one point to 15.
Fitch Ratings predicted last week that homebuilders would see modest gains in 2012, with a stable outlook.