Home builder confidence nearly reaches 10 year high

A new survey reports that confidence levels among home builders are their highest level in almost a decade.

In the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) confidence for newly built, single family homes in July was up one point to 60, the highest the HMI has been since November of 2005. 

"The fact that builder confidence has returned to levels not seen since 2005 shows that housing continues to improve at a steady pace," said NAHB Chairman Tom Woods, in a statement. "As we head into the second half of 2015, we should expect a continued recovery of the housing market."

The HMI is compiled monthly from a survey of home builders nationwide. Indices of 50 or more indicate good conditions and expansion whereas scores below 50 signal poor conditions and contraction.

Two of the other three components of the HMI also showed improvement in July. The index for sales expectations over the next six months was up two points to 71 while the index for current sales conditions rose 1 point to 66. Only buyer traffic fell in the recent survey, dropping one point to 43.

Each of the four domestic regions rose in the survey. The South and Midwest each rose a point to 61 and 55, respectively. The West jumped three points to 60. The Northeast, despite posting a three point gain, still came in under 50 at 47. 

"[The report] does add weight to the increasing pile of evidence suggesting that a real housing upswing is underway," Ian Shepherdson, chief economist with Pantheon Macroeconomics told MarketWatch.

With builder confidence up, new homes in the market are soon to follow. Graveco's Contract Collector loan servicing software makes it easier for private lenders to set ideal terms for mortgages.