This month finds that builders' confidence in the market for newly built, single-family homes is holding steady at a revised level of 28 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

The newest data show that following five consecutive months of gains, the HMI is holding at its highest level since June 2007.

“While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving,” said Barry Rutenberg, NAHB chairman. “This is demonstrated by the fact that the HMI component measuring builder expectations continued climbing for a sixth straight month in March, to its highest level in more than four years.”

“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.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” In March, builders said conditions were slightly down, but six-month expectations and customer traffic were up.

Regionally in March, the HMI gained five points to 25 in the Northeast, two points to 32 in the Midwest and two points to 27 in the South, but fell 10 points in the West following a 22-point gain in the previous month.