"Builders remain confident as favorably low interest rates on home mortgages and solid price performance continue to stimulate homebuying," said NAHB President Kent Conine. "And builder expectations for home sales through the remainder of the year are high throughout the country."

The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Homebuilders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair," or "poor," where any number over 50 indicates that more builders view sales conditions as good than poor.

Each of the component indexes recorded continued to gain in July. The index gauging current single-family home sales rose two points to 69; the index gauging traffic of prospective buyers rose three points to 50; and sales expectations topped 73.