New home sales surged 18% in August, the largest one month jump since 1992 and highest sales since May 2008. Total homes sold reached 504,000, beating expectations of 426,000.

From August 2013, new home sales have risen 33%. The report indicated that the number of homes available on the market has declined. If this continues, it may be good news for homebuilders including KB Home (KBH), Lennar (LEN) DR Horton (DHI) and Ryland Homes (RY).

On Wednesday, KB Home released its third quarter earnings results, which came in higher than a year ago.

Investors have seen disappointing results in new home sales and housing starts over the last few months, but many investors are seeing an upside after this latest report.

For mutual fund investors that are expecting the housing recovery to continue, there are several funds that offer exposure to some of the biggest home builders mentioned above.

Economic reports are an important indicator for mutual fund investors that have exposure to stocks that could be impacted. This report is important for investors because it gives a general overview of the state of the housing sales.