According to the National Association of Home Builders and Wells Fargo Housing Market Index, builder confidence has risen yet again in December to its highest level since May 2010. This is also the first time since 2009 where this confidence has risen for 3 straight months. The builder confidence scale is calculated on builders’ outlook of single family home sales over the next six months.

The reason that this indicator is important for the real estate market is because it indicates that buyers are showing more interest and submitting requests for model/community information more. During certain positive economic conditions, such as the recent drop in the unemployment rate, buyer and seller confidence increases which eventually results in a growth in the market overall.

As markets steadily improve nationwide, unemployment drops while home sales and prices continue to rise. Both the buyer and builder confidence should continue to rise in 2012, which means that the best opportunity to purchase a new home in recent years will quickly slip away.