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Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI). It showed that assessments of housing activity improved notably in July, with the composite HMI index climbing to 57, the highest level seen since early 2006, while the buyer traffic index also improved, rising to a level of 45.

It's important to note that July continued to firmly reverse the weakening trend seen earlier in the year, suggesting that activity in the new-home market has picked up notably and is remaining strong even beyond the traditionally strong first-quarter period. Looking at the data, it is fairly clear that the last year of results indicate a major change in builder sentiment, likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory, and a more balanced monthly supply.

Source: Homebuilder Blues: NAHB/Wells Fargo Homebuilder Ratings -- July 2013