Homebuilder confidence rises

The index measuring current confidence rose two points, from 12 in April to 14 in May.

Any reading under 50 still indicates the majority of builders view conditions as poor.

“The fact that the May [Housing Market Index] continued to tick up from April’s 5 point increase provides confirming evidence that the improved confidence level was no fluke,” said NAHB chief economist David Crowe. “This continued increase indicates that home builders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”

A separate index measuring expectations for the next six months rose three points to 27.

It is the first back-to-back increase in builder confidence since February 2008 and is now at its highest level in eight months.

Builders and Realtors are hoping lower prices and historically low mortgage rates will overcome tighter lending standards. The housing market may also benefit this year from an $8,000 tax credit for homebuyers.

Earlier this month, the National Association of Realtors reported pending sales of existing homes rose 3.2 percent in March, the first back-to-back increase in pending sales in a year.