Home Builders, Developers See
Light at the End of the Tunnel

Home builders' confidence in the U.S. market improved for a second straight month in November, an industry trade group said Thursday.

The housing market index improved to 33 in November from 31 in October, the National Association of Home Builders reported. The index had fallen for eight months in a row to a 15-year low of 30 in September.

The index shows that about one-third of builders are optimistic about the housing market. A year ago, the index was at 61 and it peaked at 72 in June 2005.

Economists surveyed by MarketWatch had been predicting the index would remain at 31. See Economic Calendar.

"More and more builders are seeing light at the end of the tunnel," said David Pressly, president of the NAHB and a builder based in Statesville, N.C. "Our members are telling us that the market is steadying after a significant downward correction. We look for sales to stabilize and gradually move up in the coming months."

"The data tell us that the worst of housing is behind us," said Robert Brusca, chief economist for FAO Economics. Realtors also see "signs of recovery."

"It is still too soon to definitively confirm" that a bottom has been reached, wrote Brian Carey, an economist for Moody's Economy.com.

The report comes one day before the Commerce Department discloses data on U.S. home construction for October. Economists are looking for a 4.5% decline in housing starts to a seasonally adjusted annual rate of 1.69 million.

All three components of the NAHB index moved higher in November:

• The single-family sales index rose to 33 from 32.
• The future sales index rose to 46 from 42.
• The traffic of prospective buyers' index rose to 26 from 23.

The index improved in two of four regions, and it fell in the other two.

Specifically, builder confidence in the Northeast improved to a reading of 37 from 35, while the index rose to 40 from 38 in the South. Confidence fell to a cyclical low of 34 in the West and matched a cycle low of 16 in the Midwest

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