Earlier this week the National Association of Home Builders reported that its national index of industry sentiment for March improved to 17, which is the first gain in five months with the last four monthly reading being 16.
What does this number mean? Well, any reading below 50 indicates negative sentiment about the market and the index has not been above the 50 level since mid 2006.
Despite the slight improvement this month homebuilders' outlook still remains low because of a weak pace of construction and falling home prices. 2010 was the worst year in more than a decade for sales of previously owned homes and the worst for new-home sales in nearly 50 years.
The breakdown is simple; fewer homes mean fewer jobs. On average, every new home built creates the equivalent of three jobs for a year and generates close to $100,000 in taxes.
According to some economists home prices will hit bottom this year before a modest recovery can take hold. California, one of the hardest hit states, continues to struggle with foreclosures and short sales.
Regardless, March's reading is the highest the homebuilder index has seen since May 2010 when it reached 22. Regionally, the West rose from 13 to 17.