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Homebuilders Expect Market to Improve Next Year

Homebuilders believe the worst of the housing slump has passed and that the market will rebound in the coming year, according to a December survey by the National Association of Homebuilders.

The NAHB/Wells Fargo Housing Market index fell one point to 32 but held above the 15-year low of 30 reached in September. Lower mortgage rates and cheaper new-home prices buoyed buyer demand, the group said.

“This was the third consecutive month in which builder expectations for sales over the upcoming six-month period have improved, and it’s a good sign of things to come in the new year,” said NAHB President David Pressley.

“Other recent indicators confirm that buying conditions have improved and that demand is stabilizing - including improvements in measures of housing affordability, strengthening consumer assessments of home buying conditions and an upswing in applications for mortgages to buy homes,” added NAHB Chief Economist Dave Seiders.

That could bode well for housing starts, which the Commerce Department releases Tuesday and which many hope will remain low as builders get rid of inventory.