Tax credits, low interest rates lead to 2-point boost in homebuilder sentiment index

The National Association of Home Builders says its housing market index rose two points in February, a sign that low interest rates and federal tax credits for buyers boosted confidence in consumer demand for new homes.

The builders group says the index reached 17 in February, after falling for two consecutive months.

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The increase shows builders are feeling better about their prospects as evidence emerges that the job market may be improving. But challenges still exist, such as a high number of foreclosures and a lack of financing for new projects.

The index reflects a survey of 528 residential developers across the U.S. Index readings below 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006.