Highlights Home builders are reporting the best conditions in more than five years, based o n the housing

market index which keeps on improving with a two point gain in Dec ember to 47. This index is up now for eight months in a row and is quickly appro aching the breakeven 50 level. A reading over 50 would indicate that more builde rs describe conditions as good than bad. Two components are now actually over 50 with present sales and six-month sales b oth at 51. The lagging component is traffic which is still on the sub-50 side at 36. But the report notes a positive about traffic, saying "more serious buyers" are coming forward. The report stresses that fewer vacant and foreclosed proper ties are on the market which is a big plus for sales. The report once again cite s tight lending standards as a negative for the new home market. Regional data show a sharp pickup in the Northeast which was held down in Novemb er, likely the result of Hurricane Sandy. The region showing the greatest streng th, and the only region over 50, is the Midwest with a reading at 53. The fact that the main index is still under 50 is a reminder of how deep the hou sing bust was and how lasting its effects have been. But recovery is now picking up steam and points to continued improvement for next year -- and increasing ec onomic leadership from residential construction. The Dow isn't showing any react ion to this report which however is definitely a positive factor for the session . Housing starts will be posted tomorrow morning.