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Homebuilders’ confidence rises to a 6½-year high

Recent housing industry data are giving builders more optimism that a turnaround in real estate will endure after years of stagnation.

Gregory Bull/Associated Press/File 2012

Recent housing industry data are giving builders more optimism that a turnaround in real estate will endure after years of stagnation.

LOS ANGELES — Confidence among homebuilders inched up this month, to the highest level in more than 6½ years, as they reported the best market for newly built homes since the housing boom.

The National Association of Home Builders/Wells Fargo builder sentiment index, released Tuesday, rose 2 points to 47 from a revised 45 in November. That was the highest reading since April 2006, just before the housing bubble burst.

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Readings below 50 suggest negative sentiment. The last time the index was at or above that level was in April 2006, with a reading of 51. It has been trending higher since October 2011, when it stood at 17.

The latest index, based on responses of 441 builders, reflects growing optimism that a turnaround in housing will endure after years of stagnation.

A component of the latest survey that measures current sales conditions rose 2 points to 51, the highest level since April 2006. A gauge of traffic by prospective buyers increased 1 point to 36, also the highest reading since April 2006.

However, the index tracking builders’ outlook for sales over the next six months slipped 1 point to 51, back to where it was two months ago.

Sales of new homes fell slightly last month, dragged lower by steep declines in the Northeast partly related to Hurricane Sandy. But they were still 17 percent higher in October than a year earlier.

Builders are locking up more land and ramping up construction. All told, builders broke ground on new homes and apartments in October at the fastest pace in more than four years.

Olson Homes, which builds homes in Southern California priced roughly from $300,000 to $700,000, said demand has picked up since February, and the company now projects sales will be up 45 percent for the year.

At Houston-based David Weekley Homes, which builds homes in eight states, sales are up 40 percent from last year. That’s allowed the builder, which sells homes priced from $150,000 to $1 million, to raise prices as much as 5 percent.

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