According to the National Association of Home Builders (NAHB), a more affordable housing market and the first-time homebuyer tax credits helped the homebuilders’ confidence index rise by two points to 16 in May – marking the second consecutive increase after the five-point leap in April.

The rise in May index results from a jump in two out of three components of the index. While current sales conditions rose two points to 14, the sales expectations for the next six-month period increased three points to 27.

Commenting on the second rise of the index in a row, David Crowe, chief economist at NAHB said: “This continued increase indicates that homebuilders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”

However, the 16-point confidence index is still pretty much on the lower side – considering the fact that any figure below the 50 mark reflects that conditions are largely viewed as ‘poor’ rather than ‘good’ by most of the builders. 

NAHB Chairman Joe Robson said the first back-to-back rise since February 2008 has increased the confidence of the builders, who now identify the conditions as “some of the best home-buying conditions.” Moreover, the housing market will likely gain from an $8,000 tax credit for homebuyers!