Builder confidence hits nearly seven-year high

“However, 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.”

The index is inching closer to the 50 level that indicates positive sentiment. 

Two of the HMI’s three component indexes are now above that level.

The component gauging current sales expectations rose two points to 51 in December, while the index of sales expectations in the next six months fell one point, to 51. The component measuring traffic of prospective buyers increased one point, to 36.

“While there is still much room for improvement, the consistent upward trend in builder confidence over the past year is indicative of the gradual recovery that has been taking place in housing markets nationwide and that we expect to continue in 2013,” said David Crowe, NAHB’s chief economist.

In October 2011, the index stood 30 points lower at 17.