Data released earlier this month showed that homebuilders began construction on 1.5% fewer homes in July while applications for building permits fell 3.2%. The National Association of Home Builders (NAHB) reported that homebuilder sentiment held steady at a low reading of 15 in August as the usual suspects -- an oversupply of homes, inaccurate appraisal values and tight lending -- kept home purchasers at bay. Last Thursday, the National Association of Realtors reported that sales of previously occupied homes unexpectedly fell 3.5% in July as potential homebuyers cancelled more contracts. "Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers," said NAR chief economist Lawrence Yun. "Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs." Stocks in the homebuilder sector were mixed Wednesday, including the SPDR S&P Homebuilders ( XHB) and iShares Dow Jones US Home Construction ( ITB) exchange-traded funds that tracks the sector. The ETFs remain around 70% and 80%, respectively, off their early 2006 peaks. Among individual builders, PulteGroup ( PHM) lost 0.3%, Lennar ( LEN), largely considered a leader among the homebuilders, shed 1.1% and small-cap builder KB Home ( KBH) fell 1.5%. Toll Brothers ( TOL) gained 2.5%, D.R. Horton ( DHI) rose 2.2% and Hovnanian Enterprises ( HOV) added 2.2%. -- Written by Miriam Marcus Reimer in New York. >To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to @miriamsmarket. >To submit a news tip, send an email to: firstname.lastname@example.org.