Along the Wasatch Front, builders took out permits for the construction of 4,062 homes from January through July, according to Construction Monitor, a service that tracks homebuilding activity throughout the West. That's up nearly 38 percent from 2,951 in the same period in 2011.
Nationally in the past 12 months, new-home sales have jumped 25 percent. Still, the increase is from a historically low level, and they remain well below the annual pace of 700,000 that economists consider healthy.
The housing market is making a modest but steady recovery in part because homes are more affordable. Mortgage rates have fallen to near-record lows. Housing prices are about one-third lower than at the peak of the housing bubble in 2006. Those trends have helped lift sales of new and previously occupied homes.
Sales of existing homes increased in July from June, the National Association of Realtors said Wednesday. They have jumped 10 percent in the past year.
Other recent reports also point to a recovery. Home prices have begun rising nationwide. They increased 2.2 percent in May from April, according to one leading index, and were up. That was the second straight increase after seven months of flat or declining prices.
In Salt Lake County, the single-family median price was $214,900 in the second quarter, up nearly 6 percent from the same period in 2011, the Salt Lake Board of Realtors said. The last time prices increased was in the second quarter of 2007.
Builders 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.
Last month, U.S. builders responded by applying 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 3½-year high in June.
Although new homes represent only a small portion of the housing market, they have a disproportionate impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to statistics compiled by the National Association of Home Builders.
The housing market has a long way to go to reach full health. Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million. That's still well below the 5.5 million annual sales pace that is considered healthy.
One trend holding back sales is that many people are still having difficulty qualifying for home loans. Banks have tightened credit standards for mortgages, according to a report last month by the Federal Reserve.
Another factor holding back sales is that there aren't many newly built homes available. New homes for sale dipped last month to 142,000, the lowest on records dating back to 1963.
A six-month supply is generally considered healthy by economists. At the current sales pace, it would take 4.6 months to exhaust the July supply.
The Salt Lake Tribune contributed to this story