Homebuilders see small signs of life

WASHINGTON (AP) — Increased interest by potential buyers left U.S. homebuilders less pessimistic about the housing market for the fourth straight month in January. But tighter lending standards are still keeping many of those buyers from purchasing new homes.

The National Association of Home Builders/Wells Fargo builder sentiment index rose four points to 25 in January. That’s the highest level since June 2007. It’s just the third time the index has been at 20 or above in two years.

Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.

Last year, the number of people who bought new homes fell to its lowest level on records going back nearly a half-century. The figure for 2011 will likely be below that level.

Builders are struggling to compete with foreclosures, which have forced down prices of previously occupied homes. And many buyers are finding it hard to qualify for loans or meet higher required down payments.