In another sign that the housing market is finally reviving after years of declines, the Housing Market Index (HMI), prepared by the National Association of Home Builders (NAHB) and Wells Fargo (NYSE:WFC), recorded its highest monthly rise in nearly 10 years.
This month, the HMI rose 6 points to 35, topping an average forecast of 30 from economists, Bloomberg noted.
The index is compiled by surveying homebuilders, who rate their current sales and estimate their sales for the next six months.
The index for sales of single-family residences rose to 37 in July, the best reading since February 2007, while the sales outlook for the next six months for single-family homes hit 44, the best reading since April 2007.
In the years prior to the economic downturn, the HMI averaged a monthly reading of 54. It hit its highest reading in March 2007 before falling to its worst showing in January 2009, when it stood at just 8.
NAHB representatives said homebuilders were seeing improved home sales, with more buyers entering the market. Record-low mortgage interest rates continue to fuel home buyer interest.
The news did little to help homebuilders. Shares of Ryland (NYSE:RYL) and Toll Brothers (NYSE:TOL) slipped fractionally in Tuesday morning trading in a down-trending market, while D.R. Horton (NYSE:DHI) shares dipped almost 2%.