The National Association of Home Builders/Wells Fargo builder sentiment index, released Wednesday, rose to 44 in May from 41 in April. It was the first month-to-month gain since December.
Measures of interest by prospective buyers and current sales conditions also improved from April’s readings.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.
Concerns over rising costs for land, materials, and labor have dimmed confidence in recent months. April’s reading, which was revised one point lower this month, marked the lowest confidence level since October.
Until December, the index had been steadily trending higher since October 2011, when it was at 17. Overall, though, it remains well above the January 2009 low of 8.
Builders are benefiting from a sustained rebound in housing that began a year ago, powered by job growth, low mortgage rates, rising home values, and a decline in the number of foreclosures.