WASHINGTON -- U.S. homebuilders are growing a little less pessimistic about the depressed housing market after seeing more people say they might be open to buying a home this year.
The National Association of Home Builders/Wells Fargo builder sentiment index rose four points to 25 in January. That's the highest level since June 2007.
Even with the fourth straight increase, the general mood is dim. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached 50 since April 2006, the peak of the housing boom.
The index is rising because builders are seeing a rise in people shopping for a home - not because they are seeing more sales. In fact, 2011 may end up being the worst year for new-home sales on records dating back half a century.
Builders are struggling to compete with foreclosures, which have forced down prices of previously occupied homes. And many people are finding it hard to qualify for loans or meet higher required down payments.
Low appraisals are scuttling some deals after contracts have been signed. As a result, some people who want to buy a new house are holding off because they can't sell their home.
Those in a position to buy are benefiting from lower prices and mortgage rates. The average rate on the 30-year-fixed mortgage is at a record low 3.89 percent. Yet those factors have done little to boost home sales.
David Crowe, the builder group's chief economist, pointed to some regional pockets of strength. New Orleans, Pittsburgh and other smaller areas, in particular, have reported increased buying.
New homes make up a small portion of housing sales. But they have an outsize impact on the economy. The builder trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.
Sentiment about current single-family home sales rose three points to 25, according to a separate gauge in the survey. Builders are also more optimistic about future sales.
The outlook improved across the country, rising nine points in the Northeast, five points in the West, two points in the South and one point in the Midwest.
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Homebuilder Sentiment Rises to Highest Level Since 2007
After bidding farewell to 2011, Realtors, investors and regulators the world over are no doubt wondering: Will 2012 be the year the real estate market finally rides out the aftershocks of the housing bust and mounts a full-on recovery?
But even if home prices don't trend up nationwide, certain markets seem almost guaranteed to do well. Looking at a variety of sources, AOL Real Estate brings you 10 of this year's most promising housing markets for 2012.
Tech companies are driving job growth in Worcester, according to MSN Real Estate. That may help real estate prices, which slipped 3 percent this past year, but are expected to tick up 2 percent in 2013.
Spanning a generous 2,730 square feet, this alternatively colored home was built in 1987 and is equipped with its very own "game room," according to the listing.
Kansas seems to have fared better than most through the real estate storm. Another one of the state's major cities, Topeka is predicted to post the second-highest increase in real estate prices, according to Realtor magazine.
Here is a sprawling home in Topeka, one of the ritzier houses in town. The $429,000 home offers five bedrooms and 4,782 total square feet.
On the hunt for new digs in a market that's turned the corner of the housing slump? Look no further than Huntington, W.Va. HousingPredictor expects the town's real estate prices to climb by 4 percent this year.
A tip of the hat to DailyFinancefor directing us to Tacoma, Wash., a city whose real estate prices are set to skyrocket, according to a Fiserv prediction. The financial services information provider projects that prices in Tacoma will jump a staggering 24.9 percent.
Located in University Place, a suburb just outside of Tacoma, this listing offers a taste of the sort of homes that may benefit from the price boom.