The National Association of Home Builders' NAHB/Wells Fargo Housing Market Index rose to 35 in August from 34 in July, beating market expectations of 33, but builder confidence remained weak. The index has stayed below 40 for 16 straight months, its longest such run since 2012, and has not been above 50, the level signaling favorable business conditions, for more than two years. A measure of current single-family home sales improved to 39 from 37 and reached its highest level since May, while gauges for the next six months and prospective buyer traffic were unchanged. Sentiment improved in the Northeast, South and West, and was flat in the Midwest. Builders are still contending with rising construction costs, broad economic uncertainty and high borrowing costs. U.S. gasoline prices have moved above $4 per gallon and diesel is averaging $5.45, while the 30-year fixed-rate mortgage stood at 6.77% in the week ended August 7. Builders have continued to lean on price cuts and incentives, with more than 30% cutting prices for 16 consecutive months, the average reduction holding at 6%, and roughly two-thirds offering some form of incentive. The source said the details point to continued weakness in homebuilding, pressure on profit margins and a recovery that may take time, especially if energy costs linked to the Iran conflict rise further.