A measure of sales expectations for the next six months increased to 29 in January, the highest since September 2009, from 26, today's report showed. The gauge of buyer traffic rose to 21, the highest since June 2007.
Builders in the Northeast led the increase, with that region's index rising 9 points to 23 this month. In the West, the measure climbed 5 points to 21, while smaller gains were reported for the Midwest and South.
"Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets," NAHB Chief Economist David Crowe said in a statement.
Nonetheless, "caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market," Crowe said.
Survey Breakdown
The confidence survey asks builders to characterize current sales as "good," "fair" or "poor" and to gauge prospective buyers' traffic. It also asks participants to gauge the outlook for the next six months.
At Lennar Corp., the third-largest U.S. builder by revenue, orders jumped 20 percent in the three months ended Nov. 30. Demand rose to 3,027 homes for the company's fourth quarter from 2,520 a year earlier, Lennar said Jan. 11
"As I look ahead to 2012, I'm cautiously optimistic that we're seeing a real bottom form and that we will begin to see signs of recovery," Stuart Miller, chief executive officer at Miami-based Lennar, said on a Jan. 11 conference call.