The National Association of Home Builders (NAHB) Housing Market Index (HMI) rises in January to a reading of 25. This is up 4 points from the previous December reading of 21 and marks the 4th consecutive month of increases. The last time the HMI had a reading of 25 or more was in June of 2007. Though moving in an encouraging direction, readings over 50 are considered positive, a level last reached in April of 2006.

The increase in the index can be attributed to two factors:

1. Homebuyers’ decreasing desire to buy a foreclosed property and instead wanting to build new
2. An increase in consumer confidence which is allowing buyers to open up their wallets

The NAHB Housing Market Index is based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next 6 months as well as the traffic of prospective buyers of new homes.