Washington, Jan 19 (IANS): US builder confidence index in the market for newly built, single-family homes in January increased four points to 25, a leading industry report showed Wednesday.

The fresh number marks a fourth straight month in which builder confidence has improved, and brings it to its highest level since June 2007, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

"This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide, " said NAHB chairperson Bob Nielsen.

Each component index of the HMI saw a fourth consecutive month of increase. The index gauging current sales conditions rose three points to 25, the highest level since June 2007, and the index gauging sales expectations in the next six months edged up three points to 29, its highest point since September 2009, said Xinhua.

While the index gauging traffic of prospective buyers gained three points to 21, the highest point since June 2007.

"Caution remains the word of the day as many builders continue to voice concerns about potential clients being unable to qualify for an affordable mortgage, appraisals coming through below construction cost, and the continuing flow of foreclosed properties hitting the market," noted NAHB chief economist David Crowe.

Any reading below 50 indicates negative sentiment about the market. The index hasn't rebounded above that level since April 2006.