The National Association of Home Builders (NAHB) announced today that the group's builder confidence index rose by five points in May to the highest level since May 2007, before the financial crisis.
The NAHB/Wells Fargo Housing Market Index (HMI) rose to 29, according to a release, reversing a decline in March and continuing an upward trend that started at the beginning of the year.
Builder confidence in the Midwest region rose 5 points to 27 in May. The Western region was the only region to decline in May, a loss of 2 points.
"While home building still has quite a way to go toward a fully healthy market, the fact that the HMI has returned to trend is an excellent sign that firming home values, improving employment and low mortgage rates are drawing consumers back," said NAHB Chief Economist David Crowe, in a release.
Though the increase in May is a good sign, it does not mean the housing market is completely back from the financial crisis, as any index number under 50 shows that the majority of respondents reported that conditions were poor.