US homebuilder confidence at 2-1/2 year high in May

WASHINGTON May 17 (Reuters) - U.S. home-builder sentiment rose in May to the highest level in more than 2-1/2 years, boosted by a homebuyer tax credit and strengthening economy, the Natio 536870913 1851878432

The NAHB/Wells Fargo Housing Market index increased three points to 22, the highest since August 2007, the group said in a statement. It was the second straight month of gains in the inde 536870913 2016283137

Economists polled by Reuters had expected the index to inch up to 20. A reading below 50 indicates more builders view sales conditions as poor than good. The index has not been above 50 s 536870913 1768842085

"Builders were undoubtedly reacting to the heightened consumer interest they had just witnessed as the deadline for home buyer tax credits arrived at the end of April," said Bob Jones, NA 536870913 1212293219

In addition to the tax credit, builders were also cheered by growing evidence that economys recovery from the longest and deepest recession since the 1930s was gaining momentum.

All three subindexes of the Housing Market Index, including a measure of future homebuilding activity, saw decent gains this month.

"This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home are taking the place of tax incentives to generate 536870913 543323513

The current sales conditions gauge rose three points to 23, the highest since July 2007. The sales expectations measure for the next six months also gained three points to 28, the highest 536870913 543780384

Despite the improvement in builder sentiment, Crowe said tight access to credit, competition from short sales and foreclosures were major obstacles on the path to a healthier housing mark 536870913 1702112780

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)