By Vicki Needham - 08/18/14 10:45 AM EDT
Home builder confidence rose for the third straight month to its highest level since January as job creation and buyer traffic picks up.
The August gauge shows that sentiment in the market for newly built, single-family homes rose two points to 55, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released Monday.
"Builders still face a number of challenges, including tight credit conditions for borrowers and shortages of finished lots and labor."
Any number higher than 50 reflects that more builders view conditions as good.
All three indexes posted gains in August.
Those gauging current sales conditions and expectations for future sales each rose two points, to 58 and 65.
The index gauging traffic of prospective buyers increased three points to 42.
"Each of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring," said NAHB Chief Economist David Crowe.
"Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand."
Every region saw a gain in its three-month moving average in August.
The Midwest posted a seven-point increase to 55 and the West registered a four-point gain to 56. The Northeast's index rose two points to 38 and the South was up one point to 52.