The National Association of Homebuiders released today its NAHB/ Wells Fargo Housing Market Index (HMI) reporting that the index for single-family homes went up two points to 17 in July, the highest level since September 2008.

The survey report covers 484 residential developers nationwide, tracking builders' perceptions of market conditions.

Two of the three of HMI’s component indexes posted gains in July. The index reading of current sales conditions rose three points to 17, while the index measuring traffic of prospective buyers increased by a single point to 14. However, the index gauging sales expectations for the next six months was unchanged at 26.

Builders saw an improvement in the current sales condition but continued to express concern as sales expectation for the next six months remained.

Scores for each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. The last time the index was above 50 or when the sales conditions are god was in April 2006.

Regionally, the South posted the biggest HMI gain, with a 5-point increase to 20. The Northeast posted a three-point decline, to 16, while the Midwest and West were each unchanged, at 14 and 15, respectively.