In February, the index climbed up to 17, higher than the previous index of 15 and higher than the prediction of analysts. It was also the highest point reached over the past three months.

The buyer traffic gauge stood at 12 and the measure of sales prospects surged to 27, up from the January reading of 26.

According to analysts, although figures below 50 mean that most home builders view the industry situation as poor, the increase in the index meant that builders are less gloomy about their prospects for recovery. One of the factors that have encouraged builders is the expansion and extension of the homebuyer tax credit program.

The general economic index of the Federal Reserve Bank of New York also climbed up to 24.9 in February from the January reading of 15.9. Readings above zero mean that New York and portions of Connecticut and New Jersey have significant growth prospects.

According to Michigan businessman and NAHB chairman Bob Jones, optimism is growing among home builders because of the still low mortgage rates, the improvement of the tax credit scheme and the apparent stabilization of home prices.

Of the four regions tracked by the index, confidence surged in two regions, rising to a record 19 in the South and to 13 in the Midwest. In both regions, the index rose by two points.

In contrast, confidence dropped to 19 in the Northeast and to 14 in the West. The index fell by one point in both regions.

David Crowe, the chief economist of NAHB, said that the tax credit expansion has been a positive factor for builders, but the continued foreclosures are still pushing down the level of builder expectations.

As predicted by a foreclosure tracking firm, about 3 million homes will be taken back by mortgage banks this year because of depressed property values and high unemployment rates. Last year, 2.82 million homes were put into the foreclosure process.

According to survey respondents, housing starts may have increased to an annual rate of 580,000 units in January from 557,000 units in December last year. If the scheduled release of the Commerce Department report affirms the projection, the 4.1-percent increase in housing starts shows that home builders have begun to act on their optimism.

The NAHB index for home builders’ confidence dropped to 17 in November from the unrevised index of 18 in October. Before the housing crisis, the NAHB index had never fallen below 20 in the 24-year history of the index, but over the past 19 months, the index remained below 20 points.

The index also has been below 50 points – the break-even level – for 43 consecutive months already. The index improved in September to 19 points, as indications of improvements in the market appeared, such as increases in home sales and prices. But the index later fell as home builders became discouraged by the approaching expiration of the federal tax credit scheme.

Goldman Sachs economist Ed McKelvey said that the October index was disappointing because it reinforced the view that recent increases in home sales were temporary and that the transitory factor of federal tax credit was largely driving home sales increases.

The one positive thing about the study was that it was held before Congress approved the proposed extension of the federal tax credit.

A study conducted by TD Bank Financial Group also showed a sharp slowdown in home building activity in October. TD Bank reported that new residential construction decreased by nearly 11 percent from 592,000 units in September to 529,000 units in October. The October count was far below the industry forecast of 600,000 units and was the second monthly decrease over the past 6 months. It also marked the lowest level of new home construction since April.

New single-family house construction dropped by 6.8 percent to 476,000 units and new multi-family construction fell by 15.2 percent to 89,000 units.

Housing starts in October fell by nearly 32 percent from October last year and dropped to almost 77 percent below their peak level of 2.27 million housing units in January 2006. Building permits also declined by 4 percent on a month-over-month basis to 552,000 units, driven by a drop in building permits for single-family units. It was in the multi-family subsector where building permits rose by six percent to 123,000 units.

The two reports are disappointing to housing analysts and housing market participants, but the expansion and extension of the federal tax credit are expected to spur increased activity in the home building sector.

The tax refund would enable companies to recover from their losses, especially large firms which can claim refunds of taxes they have paid over the past 5 years.

The National Association of Home Builders lobbied hard for the passage of the tax break legislation, which also includes all other types of industries. But home builders say they will be helped significantly by the tax refunds because they were directly hit by the housing meltdown and suffered huge losses.

According to several financial analysts, the tax refund would not only help home builders recover; it would also increase the cash hoard of the biggest home construction companies in the country. They claim that the largest home builders have accumulated cash after selling most of their real estate properties over the past years and not building more homes.

Based on a report released by J.P. Morgan, each of the ten top home builders in the country has a cash hoard of about $1.2 billion, compared to their average of $616 million in cash in 2007.

Rob Stevenson, an analyst with investment bank Fox-Pitt Kelton, said that home builders sold a lot of their assets over the past years and that the tax refunds would be equivalent to free money added on top of their cash hoard.

Michigan-based home builder Pulte Homes expects to receive more than $450 million in tax refunds while Lennar Corp. of Florida could receive up to $300 million. Arizona-based Meritage Homes Corp. could claim around $60 million.

With these tax breaks, the extension and expansion of the federal tax credit for home buyers and other positive developments affecting home builders, credit rating agencies such as Credit Suisse upgraded home builders, sending prices of home building stocks to higher levels.

The stocks of Lennar rose by nearly 5 percent or 63 cents to $14.14 and the shares of Meritage increased by nearly 6 percent or $1.11 to $19.90.

According to many housing analysts, what the tax breaks would really significantly help are the small home builders, which had been battered by the housing crisis and which have temporarily closed their home building activities. The cash money would enable them to restart their operations and recover.

These niche builders have been constructing homes for retirees in active adult communities that have amenities for homeowners aged 55 and above.

Steve Romeyn, head of homebuilding firm Windsong Properties, said most retirees who are buying homes in the area are moving back from other states to be nearer their families or older couples who are downsizing because they no longer like to maintain big houses.

Romeyn added that his clients are not financially troubled and that they have sold their homes at good prices. Additionally, he said that there are no short sales and foreclosure sales in the neighborhoods where he builds homes, so housing units continue to increase in price, unlike in other places in Georgia.

The Windsong builder also related that every home he builds has three bedrooms, two bathrooms, an outdoor courtyard and a bonus room in the attic. Some have sunrooms and screened porches and all units are made of high-quality building materials. Each home also has the Earthcraft energy-saving certification.

Building a home has also been good for John Wieland, whose current project is the 126-home adult community Cadence at Woodmont. The homes feature main-floor living and private courtyards. Home prices range from $300,000 to $500,000.

Another niche builder is Active Lifestyle Communities, which is continuing the development of the 728-home active adult community at Laurel Canyon. Evan Cramer, head of Active Lifestyle, said that one-story homes in the community are priced from $236,650 through $450,000, with many units featuring basements.

The Laurel Canyon community features a large clubhouse that includes a teaching kitchen, pottery kilns, a lakeside amphitheater, indoor and outdoor pools, tennis courts and membership to the nearby golf course.

Another home builder in Cherokee is Dan O’Dwyer, who is currently selling the Earthcraft-certified homes he has built at Heritage Springs. Home prices start at $219,900, with some houses attached and others detached. O’Dwyer built the homes in a way that their exteriors are maintenance-free.

An exclusive development called Hawk’s Ridge is also targeted at people who do not want the responsibilities of property maintenance. Homes in this project would be smaller than similar developments and would be priced below $1 million. Indeed, building a home with amenities for the financially stable retiree is profitable.

Initially, installing a solar water heating system will cost you more than installing a standard water heating equipment, but the thermal system will save you money and in the long-term, you will get positive cash flow.

Since you are still building your home, you can save more because you can make your house design in a way that it will make solar thermal installation easier and that will feature other green building technologies.

Integrating green systems during your construction is definitely better and more cost-effective than making additions or revisions for green technology to an already finished house.

For instance, before building, you can analyze your geographic location and then see how you should orient your roofing so that your solar collectors can receive the most rays from the sun.

What you should do, according to Jim Cika of solar product manufacturer VELUX America, is to take a look at the different solar technologies available, their installation, costs and benefits before building a home. Look at solar photovoltaic, which uses solar heat to generate electricity, or solar thermal, which uses solar heat to heat water.

Look also at the requirements of the federal government’s Energy Star program for solar water heating systems so you can get your rebates up to $2,000. The rebate program reimburses 30 percent of your total system costs.

Cika said that the installation cost for a solar water heating system ranges from $8,000 to $12,000, depending on the water heating requirements of your household. He said that typically, two or three solar collector panels are installed on the rooftop and that solar hot water tanks are offered in 80-gallon or 120-gallon sizes.

According to Cika, you can reduce your water heating costs by up to 80 percent with the thermal heating system. This will result in a substantially reduced total energy bill because water heating accounts for up to one-fourth of total energy consumption in an average household, as calculated by the U.S. Energy Department.

In a new home construction, the installation cost of the thermal heating system can be added to the total cost of the house and to the home loan amount. The monthly energy savings you can get from the thermal heating system would exceed the increase in your resulting monthly amortization, according to Cika, so consider installing a solar water heating system before building a home.

Lucky for you, there are a lot of home builders who specialize in this particular home construction. You will only have to decide which construction and design you will go with. The choice usually ranges from using recycled materials to installing energy-efficient features to indoor quality of air to land-use.

With so many ways that a homeowner can participate in the green home movement, building a home can be so much simpler. Consider the following tips:

Installing solar panels, maximizing daylight, collecting rainwater – by utilizing natural energy and resources, you will be able to cut energy and water consumption considerably.

Use of sustainable products such as cork, bamboo and wheatboard cabinets – sustainable products usually make use of renewable materials and will have almost no impact on the environment.

Choose locally-manufactured materials and products – aside from not wasting energy since you have to transport these items; you also help the local economy.

Remodeling and upgrading to energy-efficient features – this could include the installation of maximum insulation, windows that are efficient in controlling penetration of sunlight, choosing water-fixtures with low flow, installation of tankless water heater, upgrading to a more efficient HVAC system and going for energy-efficient appliances.

Of course, the only way you can attain your “green” objectives is by working with a home builder who is familiar with sustainable design as well as green building. Your contractor should also be able to give you expert advice regarding energy efficiency.

Do not be surprised if such construction will cost you more than building a home without these green features. Just remember that you will actually be saving money in the long run and only have to shell out money at the beginning. For this reason, you might want to shop and compare home building cost and conduct some research about green homes. This way, you become familiar with the ins and outs and are able to make informed decisions.

One of the reasons for the decline is the nearing expiration date of the tax credit program. For the NAHB, the upward trend being enjoyed since the beginning of the year is slowly stalling. And to make things worse for home builders, they are still facing the challenge of obtaining financing as well as reasonable appraisals.

Chief Economist of NAHB, David Crowe, also pointed out that it is the first time that the HMI, all its three index components, declined since November 2008. It is therefore obvious that the home construction industry is reliant on the tax credit incentive to boost new home sales.

In fact, considering that the expiration is almost a month away, builders are finding it nearly impossible to complete a sale wherein the buyer can still take advantage of the incentive. If Congress does not decide to extend the program, not only will the housing industry suffer from a decline in home sales, but there will also be an increase in unemployment rate.

On the other hand, an extension of the program would definitely have an affirmative impact on the housing industry, in terms of new home sales. This would surely stimulate the housing demand and significantly improve economic conditions.

The said HMI survey is conducted monthly and gauges home builder’s awareness of sales expectations and actual sales of new single-family units for a six-month period. Builders rate their perceptions as poor, fair or good.

In addition, the said survey asks the home building industry to rate the traffic of potential buyers as low, average, high or very high. The scores obtained for every component will be used to compute the index, which is seasonally-adjusted. A score of 50 will reveal that home builders consider current sales conditions to be good.

For October, the component that gauges present sales condition dropped by one point to 17 while the sales expectation declined by two points. The last component, buyer traffic, slipped to 14, a difference of three points from last month.

As for the home construction industry confidence per region — the Northeast showed an HMI improvement of one point; the South and Midwest regions revealed a one-point drop as well; and the West region recorded a drop of four points.

Jackson-based company, Residential Advantage, is just one of the new breed of home builders which specializes in such field. For the company, building greener homes is considered to be a part of their responsibility to society.

Based on the records of the National Association of Home Builders, there are already twelve certified home builders working in the metro Jackson area. It is thus not surprising that awareness for the environment has grown considerably is the said area.

Of course, there are still some challenges that the local house building industry still faces. One issue is the reluctance of home buyers and even some of the homebuilders to pay extra for the green features. This is despite the fact that the long-term savings that will be enjoyed by the homeowner will outweigh such costs.

For example, if you buy a 1,500 sq ft home equipped with energy-saving features, you will only have to spend around $26 compared to $112.

One way to go around this cost issue is for the builders to look for and use environmentally-friendly materials that are affordable such as fiberglass insulation. Other green features that can be installed are faucets which feature automated water flow and reflective windows and roofs to keep regulate the entrance of light.

Aside from the homes, commercial buildings can also be fitted with these green features such as reflective roof, automatic light control and a new filtration system that can handle and manage stormwater runoff better.

The green home builders also avoid using carpets, toxic pest control products and containers made from Styrofoam. They also prefer using recyclable materials. All these will not only mean a cleaner environment but also a less expensive building cost.

It is indeed nice to hear about members of the house building industry making an effort to be environmentally-friendly. Consumers, on the other hand, should seriously consider buying these green homes if they too would like to join the fight against climate change.

Many housing analysts are not sure if the extension is the answer to the housing problem. For one, the millions of foreclosed properties in the market have already dragged home prices down to record levels. And the bottom is nowhere in sight if you consider the Mortgage Bankers Association’s forecast that the foreclosure rate can be expected to climb until late 2010.

On the other hand, the federal tax credit program was actually part of the stimulus packaged which was approved at the beginning of the present year. Most of the $787 billion budget was geared to prop up the messed up housing and mortgage industries. Only those who will be buying a home for the first time and with an income of $75,000 (individual) and $150,000 (couples) are eligible.

If the extension is not approved, some economists believe that home sales will drop since the industry is still a long way from being self-sustaining. In addition, it might increase the risk for double-dip economic recession.

As the December 1 expiration nears, the building home industry has been quite vocal with its desire for the Congress to not only extend the tax credit incentive but to also expand it. Obviously, these home builders consider the program to be good for business.

Other economists consider the extension and expansion not a really good idea for the economy. They argue that, in the first place, these homebuyers will still purchase a property with or without the tax credit. Some even consider the approval similar to the program, Cash for Clunkers, which was launched to provide assistance to the car industry.

Whether or not the extension will be good for the building home industry and the national economy will be up to Congress. Basically, they have to consider the limitations of the government when it comes to using taxpayer’s money to revive an industry that has been hit hard by the mortgage mess.

The said investigation is actually the second time that the home builder attracted the attention of the commission. The first one is an investigation of Bruce Karatz, its ex-chief executive who is now awaiting trial for allegedly being involved in the manipulation of stock options.

Karatz actually resigned from his post in 2006 after being found guilty by the company of backdating his stock options, increasing his pay. He then agreed to pay over $7 million as part of the settlement that SEC offered in 2008. But despite this, he never admitted to actually committing the crime.

Meanwhile, another $550, 000 was paid to the SEC by KB Home’s ex-human resources head, Gary Ray who also settled charges by the SEC involving backdating of stock options.

The company building houses, based on Los Angeles, disclosed this most recent investigation of the commission as part of its regulatory filing and even released a statement to confirm the investigation. According to KB Home’s spokesperson, the commission did not specify what the investigation is all about which makes it hard for them to speculate.

On top of this, it was also noted that the company is being sued by an ex-employee. The lawsuit involved stock backdating of the company’s retirement plan, which resulted to the issuance of fake financial statements. The said lawsuit will go on trial on November 2010.

Lastly, the filing revealed the company’s acknowledgement of the struggles that the housing market. An oversupply of resale homes as well as newly-constructed properties was noted and blamed on soaring foreclosures and mortgage delinquencies.

It does not help that the competition in the market is quite tough, consumer confidence is at its lowest, mortgage lending guidelines are quite tight and unemployment rate has been rising steadily.

The company who has been building houses for many years now is still committed to being transparent with their business operations. In addition, they are confident that they have followed all accounting principles and policies as dictated by law. With the news of the investigation hitting the streets, company shares dropped to $15.17 or by 8 percent.