Homebuilder confidence rises in October

"The new-homes market is finally moving past the lull that occurred when the homebuyer tax credits expired and economic growth stalled this summer," said David Crowe, NAHB's chief economist. "While challenges such as competition from foreclosures, inaccurate appraisal values and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase."

Index readings lower than 50 mean more respondents said conditions were poor — the index hit a record low of 8 in January 2009. The average was 54 several years prior to the start of the recession in December 2007. 

All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to 16, while the index gauging sales expectations in the next six months rose to 23 from 18, and the index gauging traffic of prospective buyers rose two points to 11.

The measure of builder confidence increased in all four regions.