That's a big change for an industry that's been a major drag on the economy since the housing bubble burst more than five years ago. Michelle Meyer, an economist at Bank of America Merrill Lynch, forecasts that home construction will add 0.2 percentage points to growth this year. That would make 2012 the first calendar year since 2005 in which housing has added to growth.
Other recent reports add to the picture of an improving housing market, though one that's recovering at a painfully slow and uneven pace.
Home prices are rising nationwide. They increased 2.2 percent from April to May, according to one leading index. That was the second straight increase after seven months of flat or declining prices.
The median U.S. home price rose 9.4 percent in July compared with a year earlier to $187,300, the Realtors' group said. That was the biggest annual gain in 61/2 years. One reason for the increase is that foreclosed houses, which usually sell at steep discounts, are making up a smaller proportion of sales than they did a year ago.
In the Philadelphia region, the number of homes sold rose 12 percent between July 2011 and last month, and the median sale price, $225,000 in July, was 2.9 percent higher than a year earlier, according to Wednesday's HomExpert Market Report from the Prudential Fox & Roach Realtors research division.
Builders, meanwhile, are growing more confident because they're seeing more traffic from potential buyers. An index of builder confidence rose to its highest level in five years in August.
Builders in July applied for the largest number of building permits in nearly four years. They broke ground on slightly fewer new homes in July than in June. But that was after the number of housing starts had reached a 31/2-year high in June.
In May, sales of new homes reached a two-year high, then declined in June. Economists forecast that sales would rebound slightly last month. The figures for July will be released Thursday.