Homebuilder Sentiment Brightens a Little

The National Association of Home Builders (NAHB) released its monthly homebuilders confidence index for November this morning. The index rose from a revised level of 19 in November to 21 in December. A reading above 50 indicates that more builders view the housing market as favorable rather than unfavorable. The last time the index reached 50 was in April 2006.

While the index indicates a new housing market that is still in deep trouble, the positive move is the third consecutive rise:

“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 NAHB Chief Economist David Crowe. “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.”

The major housing and home building announcement comes on Wednesday this week, when the National Association of Realtors releases its revised housing starts statistics back to 2007. A downward revision in the number of new home sales of as high as 13% is expected.