Home builder confidence as measured by the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) popped up a notch from October figures to reach a still dismal 16. 

The index is compiled each month from home builders' responses to a survey in which they give their perceptions of the market for houses along three measures; current sales and expectations for sales over next six months, each rated as either "poor," "fair," or "good" and builders perception of current buyer traffic measured on a scale ranging from "very low" to "very high."  The three responses are indexed separately and combined to form the HMI.  A score of 50 or more on the HMI or any of its components indicates that more builders view the market as good than "poor."  The last time the HMI topped 50 was in April 2006 and it has not risen above 20 for 39 months.  

Builders however are demonstrating some optimism in their perceptions of future sales.  That component, which gained five points in October, added another two points in November to reach 25.  According to NAHB Chief Economist David Crowe, this is the highest that component has been since spring when the home buyer tax credit spurred sales.   

The component gauging current traffic of prospective buyers rose one point to 12, and the component gauging current sales conditions held unchanged at 16.

Crowe noted "The most concerning aspect of the report is that survey participants say they have observed absolutely no improvement in their ability to access credit to build viable new projects. This problem is clearly a roadblock to recovery in many markets."

NAHB Chairman Bob Jones said it was encouraging to see builder confidence improve over the previous two months, even though the improvement was incremental.  "Many builders are reporting that while the quantity of buyer traffic through their model homes has not improved dramatically, the quality of that traffic seems to be getting better - meaning that more people appear to be serious about buying in the near future."

The Northeast was the only region to post a decline in its HMI score in November, with a three-point drop to 13. Meanwhile, the Midwest posted a five-point gain to 18, the West posted a three-point gain to 15 and the South held even at 18.