Home builders in the Indianapolis area saw a surge in business in July, keeping residential construction activity ahead of last year’s pace.

Builders in the nine-county area filed 373 construction permits in July, a 21-percent increase from the same month a year earlier, according to the Builders Association of Greater Indianapolis.

Through the first seven months, building permits in the metropolitan area totaled 2,456, a 10-percent increase from the same period in 2011.

BAGI Executive Director Steve Lains attributed the jump in activity to improving consumer confidence and historically low interest rates. The national average rate for a fixed 30-year mortgage recently fell below 3.5 percent for the first time.

"People are sensing that now is the time to buy," Lains said. "They want to get the best interest rate and they don’t know if it will go any lower."

But home builders this year have yet to string together more than two straight months of positive building activity on a year-over-year basis.

Permit filings dropped in January, April and June, but were up in February, March and May.

July’s strong results were not helped by activity in Marion County, where builders filed 50 permits, or 15 percent fewer than in July 2012.

But permit filings in Hamilton County surged 35 percent, to 161.

Hendricks County saw 46 permits, a 10-percent increase. The most notable improvement was in Johnson County, where builders filed 46 permits, up 64 percent.

While home building is up, activity is far behind the pace set before the recession. Almost twice as many permits were filed in the first seven months of 2007 as in  the same period this year.