Homebuilder confidence at highest level since April 2010

Homebuilder optimism climbed to the highest level since the federal homebuyer tax credit started in April 2010, according to the latest National Association of Home Builders index.

The NAHB and Wells Fargo (WFC: 25.76 -0.39%) survey builders to gauge perceptions of the new, single-family home market for the next six months. A score higher than 50 indicates more builders view the market as good than poor. The index rose to 18 for October from 14 for September. The index had ranged between 13 and 17 for the 12 months prior to October’s reading.

NAHB Chairman Bob Nielsen attributed the increase to “modest improvements in buyer interest in select markets where economic recovery is starting to take hold and where foreclosure activity has remained comparatively subdued.”

David Crowe, chief economist for the NAHB, said “pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers’ attention.” Crowe said while some homebuilders changed their outlook to fair from poor, few shifted their assessment to good from fair.

The part of the NAHB survey that gauges expectations of sales over the next six months rose seven points to 24, while the component that tracks prospective buyers increased three points to 14.

The regional index in the West climbed nine points to 21, which is the highest score for that part of the country since August 2007. The indices for both the Midwest and South rose four points to 15 and 19, while the homebuilder confidence index in the Northeast for October stayed flat with September at 15.

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