The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) held steady in March, consolidating five straight months of gains for this measure of how home builders view the health of their industry.  The index is at 28, the highest level since June 2007.

The HMI is derived from a survey conducted among NAHB members each month.  Home builders are asked for their perceptions of the current market for new homes, rating the market as "good," "fair," or "poor," and asked to rate their expectations over the next six months on the same scale.  NAHB also asks them to assess the traffic of prospective buyers as "high to very high," "average," or "low to very low."  The three measures are reported individually and aggregated into the HMI.  Any number over 50 indicates that more builders view conditions as good than as poor.

The component gauging current sales conditions was down one point from February to 29, the component gauging traffic of prospective buyers was unchanged at 22, but expectations for the next six months increased two points to 36.

On a regional basis the HMI was at 25 in the Northeast, five points higher than in February.  It gained two points in both the Midwest and South to 32 and 27 respectively but, after jumping 22 points in February the Western region score fell 10 points in March.   

"Builder confidence is now twice as strong as it was six months ago, and the West was the only region to experience a decline this month following an unusual spike in February," observed NAHB Chief Economist David Crowe. "That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets."

Builders involved in remodeling got a little good news on Monday as well.  BuildFax reported that building permits for remodeling rose in January to a seasonally-adjusted annual rate of 2,998,000.  This was an increase of 13 percent over the December number of 2,653,000, and 11 percent higher than in January, 2011.

Estimates of permits rose in three of the regions. Only in the Northeast was the number down, declining 7 percent to 430,000 which was still 12 percent higher than one year earlier.   Remodeling in the South rose 17 percent from December and 6 percent from a year earlier to 1,122,000 permits and the Midwest increased 9 percent and 14 percent respectively to 595,000.  Permitting in the West rose 10 percent month-over-month and 14 percent from January 2011 to 595,000.  

 "Residential remodeling this winter is as strong as it has been in more than five years.  We expect residential remodeling to continue to grow throughout 2012," said Joe Emison, Vice President of Research and Development at BuildFax.