The index measuring homebuilder confidence in the market for new single-family homes improved to 58 in December, matching the highest score in 2013 and the seventh consecutive month above 50, which indicates more builders are positive about the market than negative.

Builder confidence in the market for new single-family homes improved four points to a 58 reading in December on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), matching the high for the year and the highest index score since November 2005.

"This is definitely an encouraging sign as we move into 2014," said National Association of Home Builders (NAHB) chairman Rick Judson. "The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months. This indicates that an increasing number of builders have a positive view on where the industry is going."

All three HMI components posted gains in December. The index gauging current sales conditions jumped six points to 64, while the index gauging expectations for future sales rose two points to 62. The index gauging traffic of prospective buyers gained three points to 44.

"The recent spike in mortgage interest rates has not deterred consumers as rates are still near historically low levels," said NAHB chief economist David Crowe. "Following a two-month pause in the index, this uptick is due in part to release of the pent-up demand caused by the uncertainty generated by the October government shutdown. We continue to look for a gradual improvement in the housing recovery in the year ahead."

Derived from a monthly survey that NAHB has been conducting for 25 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor," and asks builders to rate prospective buyer traffic as "high to very high," "average," or "low to very low." Each component's score is used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.