Homebuilders are a not so optimistic about the prospect for home sales over the next six months as their confidence in the housing market remained at record low levels, a trade group said Monday.

The National Association of Home Builders/Wells Fargo housing market index remained unchanged this month at 16, where it's been since July.

The slightly brighter outlook for sales comes as builders factored in the potential benefits from the landmark housing stimulus legislation enacted last month.

Anticipating positive impacts of newly enacted housing stimulus legislation, single-family home builders registered some improvement in their outlook for home sales in the next six months, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for August. The gauge of current sales conditions climbed one point to 16, while an index of builders' sales expectations over the next six months rose by two points to 25.

“With the passage of crucial housing legislation last month that created an attractive home buyer tax credit, there is a sense that home sales may soon be reaching a turning point,” noted NAHB President Sandy Dunn in a statement. “Builders are anticipating the stimulative effects of this legislation and are optimistic that the tax credit will give those buyers who’ve been sitting on the fence the reason they need to jump back into the market.”

The law includes a temporary $7,500 tax credit for first-time homebuyers that essentially works out to a 15-year, interest-free loan.

The latest housing market index reflects a survey of 376 residential developers nationwide, tracking builders' perceptions of current market conditions and expectations for home sales over the next six months.

Index readings higher than 50 indicate positive sentiment about the market. The seasonally adjusted index has been below 50 since May 2006. Since then, the index has been on a downward trajectory as industry's fortunes have soured.

Demand for new and preowned homes is down industrywide, adding to a glut of unsold and foreclosed properties on the market. That's keeping downward pressure on home prices and contributing to smaller profit margins for builders.

Derived from a monthly survey that NAHB started 20 years ago, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Two out of three of the HMI’s component indexes posted gains in August, including a one-point rise in the index gauging current sales conditions, to 16, and a two-point uptick in the index gauging sales expectations for the next six months, to 25. The component gauging traffic of prospective buyers remained unchanged, at 12.

Regionally, the Northeast and Midwest each posted gains in builder confidence, with the Northeast up two points to 16 and the Midwest up four points to 14. Meanwhile, the South remained unchanged at 20, and the West, whose new-homes market has been heavily impacted by an upswing in foreclosure sales at cut-rate prices, posted a decline of three points to 11.