The National Association of Home Builders (NAHB)/Wells Fargo housing market index for June increased by five points from a prior reading of 54 in May to a nine-month high of 59. The reading came in higher than a consensus forecast of 56 from a Bloomberg survey of economists.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.

The current sales conditions subindex added seven points in June to reach 65, and the sales expectations subindex rose six points to 69. The subindex that estimates prospective buyer traffic rose by five points to 44.

NAHB’s chief economist said:

The [housing market] indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing optimism among builders that housing will continue to strengthen in the months ahead. At the same time, builders remain sensitive to consumers’ ability to buy a new home.

In the NAHB’s four regions, the three-month moving average index rose in the South from 56 in May to 60 in June and by a like amount to 44 in the Northeast. In the West, the index rose by two points to 57, and the index dropped one points in the Midwest to 54.

The average interest rate for a conventional 30-year fixed mortgage loan rate last week ranged between 4.125% and 4.25%, according to Mortgage News Daily. The 52-week range for conventional 30-year fixed loans is 3.55% to 4.26%.

The NAHB/Wells Fargo housing market index has remained above 50 since last July, following a sharp drop in the first half of 2014. Prior to mid-2013, the index had not risen to 50 since mid-2006.

ALSO READ: Is This the Start of a Wave of Homebuilder Mergers?

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