Homebuilder confidence in January reached the highest level since June 2007, but the outlook remains far from optimistic, according to the latest National Association of Home Builders index. The NAHB and Wells Fargo (WFC) survey builders to gauge perceptions of the new, single-family home market for the next six months. On its 100-point scale, homebuilder confidence rose four points to 25 in January from the previous month. A score of 50 signals a healthy housing market. Confidence, according to the NAHB, has risen four months in a row with the latest uptick measured across each region. "Builders are seeing greater interest among potential buyers as employment and consumer confidence slowly improve in a growing number of markets, and this has helped to move the confidence gauge up from near-historic lows in the first half of 2011," said NAHB Chief Economist David Crowe. Southern homebuilders scored the highest confidence marks followed by those in the Midwest and the Northeast. But no region registered an index score above 27. Crowe said many builders are still very cautious. They're still concerned about tightened credit conditions, appraisals coming in below construction costs and the still steady flow of foreclosures. Homebuilders are still more optimistic about sales over the next six months than they have been since September 2009, according to NAHB. "Policymakers must now take every precaution to avoid derailing this nascent recovery," Crowe said. Write to Jon Prior. Follow him on Twitter @JonAPrior.