The National Association of Home Builders/Wells Fargo Housing Market Index rose 4 points, to 25, in December. That’s the highest index reading since June 2007, and the fourth consecutive monthly increase in the index.
Shares in homebuilders Lennar Corp. (NYSE: LEN), Toll Brothers Inc. (NYSE: TOL), Hovnanian Enterprises Inc. (NYSE: HOV), and Beazer Homes USA Inc. (NYSE: BZH), among others, are up between 3% and 8% following the report.
But builders must remain cautious, according to the NAHB’s chief economist:
Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets, and this has helped to move the confidence gauge up from near-historic lows in the first half of 2011. That said, caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market.
The index reading rose in all geographic regions of the US.
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