Despite constantly battling against low foreclosed home for sale prices since the start of the foreclosure crisis, many home builders have been able to endure the battering.

National home builders have been cutting costs, streamlining processes and building smaller-size homes as they cope with losses and stock price declines.

In the West this June, increases in sales of new homes have pushed up home builder confidence and boosted hopes that the effects of foreclosed home for sale prices on new construction are weakening.

The National Association of Home Builders/Wells Fargo HMI or Housing Market Index increased by 2 points in Western states, putting current reading to 14, just one point below the said HMI reading of 15, which represented a drop of one point.

Despite the uptick in home builder confidence in Western states, the confidence level remains low, as any reading lower than 50 represents negative sentiment. Compared to other regions, the West had the lowest confidence level.

NAHB chief Joe Robson explained that the improvement of sales of new homes in recent months has improved home builder confidence levels in many areas. He attributed the increase in sales to the improved home affordability, the first-time buyer federal tax credit and lower mortgage rates.

However, Robson is concerned about the situation of the home building industry in the coming months. He said that the federal tax credit is expiring in November, mortgage rates are increasing and loans for housing construction are still very difficult to find and obtain.

Home builders in Northern Nevada are particularly affected by current developments because of large foreclosed home for sale inventories in the area.

Nevada home builders are hesitant about building new homes because of foreclosed home for sale prices that are falling further and further down to bottom levels.

Gregory Peek, a top executive of Reno-based real estate developer ERGS Properties, said that it is difficult to build a home that can compete with foreclosed home for sale prices. He explained that Northern Nevada is different from other areas in the region where some builders have been making sales.

Peek admitted that Northern Nevada experienced high peaks in home prices during the housing boom, so it is expected that they are now experiencing among the lowest bottoms in prices.

Nevertheless, many Western home builders, including Peek, expect that they will recover once foreclosed home for sale prices stabilize.