Homebuilder Sentiment at Highest Level Since May 2010

U.S. homebuilder sentiment perked up in December for the third month in a row to its highest level in a year and a half, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index rose to 21 from a downwardly revised 19 the previous month, the group said in a statement. Economists polled by Reuters had predicted a reading of 20.

The index was at its highest level since May 2010.

After stagnating in a tight range for about a year, the index has been improving since October, giving weight to analysts' views that the housing market is finding a bottom.

Readings below 50 mean more builders view market conditions as poor than favorable. The index has not been above 50 since April 2006.

"While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," NAHB chairman Bob Nielsen said in a statement.

The current sales component rose to 22 from 20, while the gauge of sales expectations for the next six months rose to 26 from 25.