Builder confidence in the single-family home market rose six points to 35 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index for July. The six points are the biggest one-month gain recorded by the index in almost a decade, and 35 is the highest point reached on the index since March 2007.

“Builder confidence increased by solid margins in every region of the country in July as views of the current sales conditions, prospects for future sales, and traffic of prospective buyers all improved,” said Barry Rutenberg, chairman of the NAHB, of the July 17 report.

NAHB chief economist David Crowe said housing is “returning to its more traditional role of leading the economy out of recession.” He noted, however, that the industry still remains fragile and that solutions to issues such as tight lending conditions, poor appraisals and the flow of distressed properties onto the market need to be found before the industry can fully recover.

The index is formed from information provided by a monthly survey conducted by the NAHB. It gauges builder perceptions for single-family home sales and expectations for the next six months and to rate traffic expectations for prospective buyers. Scores from each part of the survey are used to calculate the index.