Builder Confidence Show Signs of Turnaround

Washington, DC, May 18, 2010--U.S. home builders gained confidence in May in the market for new single-family homes, according to the National Association of Home Builders.

The housing market index rose three points in May to 22 after a four-point increase in April, the National Association of Home Builders reported Monday.

At 22, the index is at its highest point since August 2007, but is still weak. The index has been at 22 or lower just twice in its 25-year history. One in five builders thinks the market is good. It's been below 50 for 49 consecutive months.

"Builders are more comfortable that the market is truly beginning to recover," said David Crowe, chief economist for NAHB.

"The really encouraging part of today's HMI is that sales expectations for the next six months continued to gain, despite the expiration of the home buyer tax credits at the end of April."

In May, all three subcomponents of the index rose by three points. The current sales index rose to 23, the highest since July 2007. The expected sales index rose to 28, the highest in six months. The buyers' traffic index rose to 16, also the highest since September.