Housing Market Index at ten-month high

Internals of report temper enthusiasm

The National Association of Home Builders/Wells Fargo Housing Market Index increased 2 points in July to 17, the highest since September, signaling that confidence among the builders continues to come off extremely depressed levels.

A reading of 50 suggests home builders are neither optimistic nor pessimistic.

New home sales are still in a down trend as builders grapple with numerous foreclosures and price competition, but sales make up less than 10% of the entire residential real estate market.

Today's reports is encouraging, but the NAHB's chief economist pointed out, “Although today’s HMI is positive news that helps confirm the market is bouncing around a bottom, the gain was entirely contained in the component gauging current sales conditions, while the component gauging sales expectations for the next six months remained virtually flat for a fourth consecutive month."

Tomorrow, housing starts will be reported and are expected to remain nearly unchanged from the previous month.