BUILDER CONFIDENCE HITS EIGHT-MONTH HIGH

The confidence level of the nation's home builders continued to improve this month, reaching its highest level since June 2006, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

The increase reflects the continued stabilization of buyer demand, driven in part by lower energy prices, favorable mortgage rates, and employment growth. The seasonally adjusted HMI stands at 40 this month, up five points from 35 in January but down 16 points from a year ago.

An HMI below 50 indicates more builders view sales conditions as poor versus good.According to the report, builder confidence improved across the country in February, with builders in the Northeast demonstrating the largest jump in confidence.

"Builders are becoming increasingly convinced that the abrupt downslide in home sales is in their rear view mirrors and they see better times as they look at the road ahead," said NAHB Chief Economist David Seiders.Each of the HMI's three components increased this month, including a seven-point gain to 55 in the sales expectations index.

The component measuring current sales improved six points to 42, while the confidence gauge for buyer traffic increased five points to 31.

**Taken from the California Association of Realtors Bulletin, dated February 21st, 2007.