* U.S. homebuilders say demand still strong, supply tight
* Current sales conditions index climbs in August
* Future sales, buyer traffic gauges sluggish, may reflect
By Steven C. Johnson
NEW YORK, Aug 15 U.S. homebuilder confidence
neared an eight-year high in August as limited supply of new and
existing homes and strong buyer demand outweighed higher
mortgage rates, data from the National Association of Home
Builders on Thursday showed.
The NAHB/Wells Fargo Housing Market index rose to 59 this
month, its fourth consecutive monthly gain and best showing
since November 2005. July's reading, initially reported at 57,
was revised to 56.
Analysts polled by Reuters had expected the index to sag to
56 in August. Readings above 50 mean more builders view market
conditions as favorable than poor.
"Builders are seeing more motivated buyers walk through
their doors than they have in quite some time," NAHB Chairman
Rick Judson said in a statement. "What's more, firming home
prices and thinning inventories of homes for sale are
contributing to an increased sense of urgency among those who
are in the market."
The survey's index on homebuilders' view on current sales
conditions rose to 62 from a revised 59, the industry group
Mortgage rates, however, have risen sharply over the last
few months, with 30-year fixed rates hovering around 4.6
percent, about a full percentage point above where they stood at
the start of the year.
The rise was spurred mostly by speculation that the Federal
Reserve would begin winding down its monthly bond-purchasing
program later this year and likely end it in mid-2014. Those
purchases have helped keep long-term Treasury yields and average
mortgages rates low.
NAHB Chief Economist David Crowe warned that these "ongoing
headwinds of tighter credit" could slow momentum, as could a low
supply of finished lots and construction labor.
The gauge of expectations for single-family home sales for
the next six months edged up 1 basis point to 68 after having
climbed 15 basis points between May and July. The component on
prospective buyer traffic held steady at 45.
The government will release its July report on housing
starts on Friday. Economists forecast home construction likely
grew at an annualized pace of 900,000 units last month, faster
than June's 836,000 unit rate.
(Editing by Chizu Nomiyama)