Home Builder Confidence: Don't Celebrate Yet

Report: Builder sentiment improving but a long way from healthy. The NAHB Housing Market Index rose from 13 to 16, above expectations of 13, the first rise in housing activity in months.

Bulls can argue this is a sign we are finally shaking off the tax credit malaise, but don't pop the champagne corks. Like other indices of this type, a reading over 50 is optimistic, below 50 is less optimistic. A figure of 16 is still pretty miserable. How miserable? The 10-year median figure is 57 (!).

Still, in the midst of a VERY shallow job recovery, some signs of a bottom in housing are indeed welcome.

Housing stocks are down this month, with many leaders like Ryland down 9 percent. Pulte, also down 9 percent, is near a 10-year low.

The biggest issues for housing are the poor job market and the large number of foreclosures.

People who think that a moratorium on foreclosures will be helpful to housing are not thinking the issue through clearly. This will do nothing but instill more fear in buyers; foreclosures are not going away, we are just kicking the issue down the road.

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