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Builders report increasing demand for new homes

Home builders say that more families are looking to buy newly-constructed houses.

Home builders say that more families are looking to buy newly-constructed houses.

As the economy continues its slow rebound, homebuilders say they are noticing an increase in the number of consumers who are considering moving into a new home.

The National Association of Home Builders says that its monthly Housing Market Index - a measure of confidence among homebuilders - jumped three points to a reading of 16 for October. It was the first improvement in the index in five months, and the highest mark the index has reached since June.

"While challenges such as competition from foreclosures, inaccurate appraisal values, and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase," said NAHB Chief Economist David Crowe. "The toughest obstacles really come down to financing – the scarcity of construction credit for builders along with tougher mortgage requirements for consumers."

Despite the increase, the ratings were still mostly negative, since anything below 50 shows that more builders view conditions as poor rather than good.

The government's report regarding the level of new home sales in September is due out next week. Last month, the Commerce Department reported that very few families were packing up their moving boxes in August, as new home sales were at their second lowest level since the statistic debuted in 1963.