Recent improvements in the rate of new housing starts have given home builders cause for optimism, according to a new report which finds builder confidence in the single-family housing market up for the fifth straight month.

The home builder confidence index rose from 25 to 29 in February, its highest level in more than four years, the National Association of Home Builders announced February 15. These consistent housing market index figures, coupled with increased new home starts, suggest the housing market is beginning to grow in a more sustainable way, according to NAHB Chairman Barry Rutenberg.

“This is the longest period of sustained improvement we have seen in the HMI since 2007, which is encouraging,” he said in a statement.

Rutenberg warned, however, that though confidence has improved, the index is still very low. Many new homes are being appraised for less than the cost of construction, which is a huge hindrance to the market, he said.

Foreclosures are expected to increase over the coming year, as well. Recent analyses of the $25 billion settlement between five of the nation's largest banks and the government suggests that bank foreclosures put on hold during the investigation will go forward now that a settlement has been reached.

 

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