Home builder index shows improved outlook in July

NEW YORK (USA Today) — Home builder sentiment in July jumped to its highest level since September as improved sales conditions boosted confidence in the market for new single-family homes, an industry group said Thursday.

The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index moved up to 17 in July, from 15 in June.

Readings below 50 in the index, which was launched in January 1985, indicate more builders view market conditions as poor rather than favorable. The July index came in above expectations.

"In an encouraging sign, the improvement was driven by a 3 point gain in the index of present conditions to 17, implying a pickup in new home sales," said Michelle Meyer, an economist at Barclays Capital in New York.

"The fact that the gain was driven by current conditions is a positive sign, suggesting home buyer interest increased despite the rise in mortgage rates over June," she said.

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