Despite an exceedingly soggy spring selling season, that and a continued scarcity of affordable homes, Metrostudy regional directors in the majority of markets report strong gains year over year in the second quarter.

At the national level, Metrostudy expects new-home sales to increase 22.4% year over year by the end of 2015, which is far from the level they'd reached before the economic downturn, but a sign that the industry's moving toward a rebound.

Nicolas Rapp

"The U.S. housing market continues to gradually expand," Metrostudy chief economist Brad Hunter reported in Metrostudy's Q2 2015 Home Building Outlook. "While some in our industry are eager to see more rapid growth, a steady and sustainable rate of increase will be beneficial in the long run."

The southern region consistently has performed the best in terms of new-home sales volume in the U.S., which is reflected in demand scores for markets like Atlanta, Nashville, the Carolinas, and those in Texas.

Texas markets did take a hit from spring showers this year—Austin, Dallas, and San Antonio all suffered in terms of delayed construction and slow deliveries, delays that will weigh on year-over-year starts levels. The struggling oil industry also impacted Texas this month, surfacing as a pain point in commentary from our regional directors. Regional director Scott Davis believes these markets (particularly Houston) will still rank as some of the best performing markets in 2016.

"On balance, although 2015 will be flat or slightly down from 2014, even if Houston maintains a 10% decline starts this year, it will still be the top new-home market in the country," Davis says.

Seattle has received a score of 9 or above for new-home demand the past three months, but Todd Britsch, the market's regional director, posted a 7 this month, the lowest score for the market since January 2015. "King County, which is the core of job growth, has seen a 10% decrease in sales quarter over quarter," he says. "The more affordable outlying counties have seen sales increase, although at a slower pace than they have in recent quarters."

More than summer slowdown is at play in Seattle. Entry-level buyers have been priced out almost completely (including B locations) due to massive price growth—even compared with a year ago—as a result of the tech boom, which has transformed Seattle into a latter-day Silicon Valley. Seattle already had a tight supply of vacant developed lots that pushed land prices above levels last seen in 2007. Amid interest rate increase jitters, it's hard to anticipate how the market (and new-home buyers) will react. The markup necessary for builders to profit may become too much for buyers to enter the market. "A pricing bubble is coming if something doesn't change," Britsch warns.

Across the board, however, many regional directors reported strong gains quarter over quarter and year over year for starts, primarily citing steady, continual job growth.

Jay Colvin, regional director of the Triad market, reports that second quarter performance was the best the arena has seen in years, "driven by robust job growth in the first half of the year." He notes that the region has seen more broad-based consumer participation, and that "inventory remains high overall, but new homes are filling the void."

Boise's never been a top-tier market for new-home demand, but despite slow job growth, regional director Eric Allen reports that construction starts in the second quarter increased 41% year over year. The recovery is spread well across the U.S., and smaller markets picking up speed are a sure sign of that fact.

The NAHB's survey of builder confidence hit its highest level since November 2005 in July as well, signaling that while we're not in a full-blown recovery, builders are confident we're on track toward one.