Builders' confidence in the market for new single-family homes was higher as the National Association of Home Builders' housing market index rose to 65 in September from a downwardly revised 59 in August.
Thomson Reuters' poll of economists predicted the index would be 60.
The September reading was the highest since October. The August reading was orginally reported as 60.
"As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move forward," NAHB Chairman Ed Brady said. "The single-family market continues to make gradual gains and we expect this upward momentum will build throughout the remainder of the year and into 2017."
"With the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them," according to NAHB Chief Economist Robert Dietz. "Though solid job creation and low interest rates are also fueling demand, builders continue to be hampered by supply-side constraints that include shortages of labor and lots."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index rose to 71 from 65, the sales expectations index for the next six months gained to 71 from 66; and the traffic of prospective buyers index increased to 48 from 44.
