WASHINGTON—Confidence among U.S. home builders about the market for single-family homes rose this month to match its highest level in 11 years, suggesting rising demand for new residential construction that could boost the broader economy.
The National Association of Home Builders housing-market index increased six points from the prior month to a seasonally adjusted 65 in September, the trade group said Monday. The August reading was revised down to 59 from a previously reported 60. A number over 50 indicates more builders view conditions as good than poor.
Economists surveyed by The Wall Street Journal expected a September reading of 60. The actual reading of 65 was the highest since October 2015, when it also was 65. The gauge hasn’t been higher than that level since October 2005.
“While some signals have been mixed across various housing indicators in recent months, the homebuilder survey points to a strong pickup in activity in recent weeks,” J.P. Morgan Chase economist Daniel Silver said in a note to clients.
Builders are more likely to begin projects when they are confident. A rise in construction would introduce more homes into a tight market while also boosting employment and spending on materials. A pullback in fixed residential investment during the second quarter was a drag on overall U.S. growth.