Homebuilder confidence rises 'slow but steady'

After a significant jump in June and then a stall in July, confidence among the nation's single-family homebuilders moved higher again in August, albeit at a slower pace.

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A monthly sentiment index from the National Association of Home Builders rose 1 point to 61, the highest level since November 2005. Any reading above 50 is considered positive. The index stood at 55 one year ago.

A contractor installs a door header inside a house under construction for Ironwood Homes in Peoria, Illinois.
Daniel Acker | Bloomberg | Getty Images
A contractor installs a door header inside a house under construction for Ironwood Homes in Peoria, Illinois.

Of the index's three components, buyer traffic increased 2 points to 45—the only component still in negative territory. Current sales conditions rose 1 point to 66, while sales expectations in the next six months held steady at 70.

Regionally, based on a three-month moving average, homebuilder confidence in the West and Midwest each rose 3 points to 63 and 58, respectively. The South gained 2 points to 63 and the Northeast held steady at 46. The Northeast has the smallest share of home construction nationally.

"Today's report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015," said NAHB Chief Economist David Crowe. "Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year."

Single-family housing starts fell in July from June but are still up nearly 15 percent from a year ago, according to the U.S. Census. They are still well below historical norms, however, even as demand for housing rises.

Mortgage applications to purchase a new home also fell in July, amid rising interest rates. Rates have started to pull back again slightly, but prices for newly built homes are still at a significant premium to existing homes.