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* Home builder sentiment index strongest since April 2006
* Current home sales reading rises above 50
NEW YORK, Dec 18 U.S. home builder confidence
rose to its strongest level in more than 6-1/2 years in
December, reinforcing the view that the housing market is on
track for further improvement and will help the U.S. economy.
The NAHB/Wells Fargo Housing Market index rose to 47 this
month, its highest level since April 2006, from a downwardly
revised 45 in November, the National Association of Home
Builders said on Tuesday.
Economists polled by Reuters had predicted the index would
be 47. The November reading was originally reported at 46.
Readings below 50 mean more builders view market conditions
as poor than favorable. The index has not been above 50 since
"Builders across the country are reporting some of the best
sales conditions they've seen in more than five years, with more
serious buyers coming forward and a shrinking number of vacant
and foreclosed properties on the market," NAHB Chairman Barry
Rutenberg, a home builder from Gainesville, Fla. said in a
"The index has been trending up pretty well. It has gained
quite a bit the past several months. It's not surprising it's
catching a breather," said Celia Chen, a housing economist at
Moody's Analytics in West Chester, Pennsylvania.
An encouraging aspect of the latest figures was the
component on current single-family home sales, which rose to 51
points from 49 in November.
"That's a pretty significant benchmark. We are going into a
good territory," Chen said.
The report's sub-index on prospective buyers edged up to 36
from 35, while its sub-reading on sales over the next six months
dipped to 51 from a revised 52 in November.
The real estate sector has recovered from its meltdown more
than six years ago due to a spate of government mortgage
programs and rock-bottom mortgage rates engineered by the
Federal Reserve, but tight lending standards have restrained
"One thing that is still holding back potential home sales
is the difficulty that many families are encountering in getting
qualified for a mortgage due to today's overly stringent lending
standards," Rutenberg said.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)