WASHINGTON (MNI) – The following is the text of the National
Association of Home Builders Housing Market Index , October 18:

Builder confidence in the market for newly built, single-family
homes rose four points to 18 on the National Association of Home
Builders/Wells Fargo Housing Market Index (HMI) for October, which was
released today. This is the largest one-month gain the index has seen
since the home buyer tax credit program helped spur the market in April
of 2010.

“Builder confidence regained some ground in October due to modest
improvements in buyer interest in select markets where economic recovery
is starting to take hold and where foreclosure activity has remained
comparatively subdued,” said NAHB Chairman Bob Nielsen, a home builder
from Reno, Nev. “That said, confidence remains quite low as builders
continue to confront overly restrictive lending policies that are
discouraging prospective buyers, problems with new-home appraisals and
widespread uncertainty regarding federal support for homeownership.”

“This latest boost in builder confidence is a good sign that some
pockets of recovery are starting to emerge across the country as
extremely favorable interest rates and prices catch consumers’
attention,” said NAHB Chief Economist David Crowe. “However, it’s worth
noting that while some builders have shifted their assessment of market
conditions from ‘poor’ to ‘fair,’ relatively few have shifted their
assessments from ‘fair’ to ‘good.’ One reason is that builders are
facing downward pricing pressures from foreclosed homes at the same time
that building materials costs are rising, and this is further squeezing
already tight margins.”

Derived from a monthly survey that NAHB has been conducting for
more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges
builder perceptions of current single-family home sales and sales
expectations for the next six months as “good,” “fair” or “poor.” The
survey also asks builders to rate traffic of prospective buyers as “high
to very high,” “average” or “low to very low.” Scores from each
component are then used to calculate a seasonally adjusted index where
any number over 50 indicates that more builders view conditions as good
than poor.

Each of the HMI’s three component indexes recorded substantial
gains in October. The component gauging current sales conditions rose
four points to 18, the component gauging sales expectations in the next
six months rose seven points to 24, and the component gauging traffic of
prospective buyers rose three points to 14.

Regionally, the West led all other areas of the country with its
nine-point gain to 21 – the highest HMI score for that region since
August of 2007. The Midwest and South each recorded four-point gains, to
15 and 19, respectively, while the Northeast held unchanged at 15.

** Market News International Washington Bureau: 202-371-2121 **

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