More home builders are buying into the growing consensus that the housing recession is finally bottoming out, and that better days lay ahead.

In spite of still-dire unemployment and foreclosure numbers, builder confidence, as gauged by the monthly NAHB/Wells Fargo Housing Market Index, rose by one point in August to 18. That’s the highest the Index has reached since June 2008, and represents a steady uptick since it sank to 8 last January. The August Index, which NAHB released Monday afternoon, is based on 474 builder responses.

While still a far cry from the reading of 72 in June 2005, or for that matter the reading of 39 as late as February 2007, the August Index shows builders’ growing faith in their current situations as well as their hope about their futures. The Index tracking how builders think their sales of single-family detached homes will be over the next six months jumped to 30 in August from 26 in July. And expectations about the traffic of prospective buyers coming through their sales offices and subdivisions rose to 16 in August from 13 in July.

David Crowe, NAHB’s chief economist, says that builders’ confidence stems from the success of the federal tax credit at spurring sales to first-time buyers. That credit expires on Nov. 30, and NAHB is engaged in a full-court press to get Congress not only to extend the credit for a year but to offer it to all qualified buyers.

“Unless Congress and the Administration focus their attention on housing right now, this improvement [in the Index] may well be short-lived,” says Joe Robson, NAHB’s chairman.

The Northeast region showed the biggest boost in builder confidence in August, rising to 24 from 16 in August 2008. The West followed, increasing to 17 from 10; the Midwest rose to 16 from 13, and the South dropped to 18 from 20.

John Caulfield is senior editor for BUILDER magazine.

Learn more about markets featured in this article: Washington, DC.