Growing interest in single-family homes from prospective buyers has boosted home builder confidence slightly in February, but the group's six-month outlook remains iffy, the National Association of Home Builders said today.

The NAHB/Wells Fargo Housing Market Index (HMI) rose one point in February to 20, which makes two consecutive months of one-point increases after the index touched its historic low of 18 in December (the index began in January of 1985). The February index reading is down by almost half from the year-earlier period, and way off its all-time high of 78 in December 1998.

The HMI index is derived from monthly NAHB data, and it measures builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

An NAHB index gauging traffic of prospective buyers rose five points to 19, its highest level since July 2007, which helped bolster the home builder confidence index in February. Three out of four regions posted HMI gains for the month, including a three-point gain to 24 in the Northeast, a two-point gain to 24 in the South and a 2-point gain to 15 in the West. The Midwest registered no change for the month at 16.

That said, the home builders remain circumspect-the index gauging sales expectations for the next six months declined one point to 27.

"Some potential buyers who have been sitting on the sidelines are starting to at least research a new home purchase given improving affordability factors and the large selection of units on the market," said NAHB Chief Economist David Seiders. "That said, builders know there's a difference between people looking and people buying, and their current outlook remains quite subdued.