Home builder confidence in May rose to the highest level since September 08 as inventory declined and affordability increased, according to survey results released today by the National Association of Home Builders (NAHB). “Builders are responding to what they perceive to be some of the best home buying conditions of a lifetime,” NAHB chairman Joe Robson, a home builder from Tulsa, OK, says in a statement today. Housing affordability largely affects the conditions of the market's buy-side waters and borrowers' ability to not only purchase a home but maintain payments. The NAHB found the affordability for median house price rose to 72.5% in Q109 from 62.4% in Q408, the highest level in the index's 18-year history. The data indicates US households with a median income can afford the price of 72.5% of homes sold within the last quarter. The index remains well above the 53.8% seen in the year-ago period. The national median house price in the quarter was $176,000, down from $219,000 in the year-ago period, while the average fixed mortgage interest rate entered into during the quarter was 5.14%, from 6.05% in the year-ago period, according to the NAHB. "There are good signs on the horizon," NAHB CEO Jerry Howard says today in a media call. "It's fair to say we could be closing in on the bottom." Despite the bright horizon, NAHB chief economist David Crowe in the media call warns of several "headwinds" possibly blowing the market's recovery off-course. Tightened underwriting standards led to decreased access to credit not only for borrowers but home builders, too. Higher expected ratios of down payment cash and smaller accepted ratios of monthly income devoted to payments also hinders borrowers' ability to access credit for home purchases, Crowe says. These restrictions, however, are often the things championed as progress from the days of subprime lending, when borrowers put little -- if any -- cash down at the closing table and spent substantial portions of monthly income on mortgage payments. Tighter credit, according to HousingWire sources, indicates the industry's efforts to correct a history of imprudent lending habits. Write to Diana Golobay.