The HMI, from the NAHB, rose for the second straight month in November.

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), which gauges home builder confidence for single-family home construction, rose for the second straight month, increasing by three points in November to a total of 20.

With October’s three-point gain, the HMI is now at its highest level since May of 2010, when the homebuyer tax credit led to a mini-boom in new construction.

Bob Nielsen, the NAHB chairman, said that building still faces challenges, even with the encouraging uptick in builder confidence.

“While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers,” Nielsen said.

An index score higher than 50 is considered healthy for the building market, as it signifies that more builders are positive than negative in their outlook.

David Crowe, the NAHB’s chief economist, said the latest HMI data is actually indicative of future performance.

“This second consecutive gain in the HMI is evidence that well-qualified buyers in select areas are being tempted back into the market by today’s extremely favorable mortgage rates and prices,” Crowe said. “We are anticipating further, gradual gains in the builder confidence gauge heading into 2012 due to these pockets of improving conditions that are slowly spreading.”

The HMI rose in three out of four regions in November, with a three-point gain to 17 registered in the Northeast, an eight-point gain to 23 registered in the Midwest, and a two-point gain to 21 registered in the South.