WASHINGTON, DC—Homebuilders today are more confident in their sales expectations than they've been in nearly nine years. That's the topline conclusion to be drawn from the latest National Association of Home Builders/Wells Fargo Housing Market Index, released Wednesday.

The latest HMI index shows that builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a level of 59, NAHB said Wednesday. This latest four-point gain brings the index to its highest reading since November of 2005.

“While a firming job market is helping to unleash pent-up demand for new homes and contributing to a gradual, upward trend in builder confidence, we are still not seeing much activity from first-time home buyers,” says David Crowe, chief economist at NAHB. “Other factors impeding the pace of the housing recovery include persistently tight credit conditions for consumers and rising costs for materials, lots and labor.”

That being the case, the association's chairman, Kevin Kelly, notes that since early summer, “builders in many markets across the nation have been reporting that buyer interest and traffic have picked up.” He calls this “a positive sign that the housing market is moving in the right direction.”

All three HMI components posted gains in September. The indices gauging current sales conditions and traffic of prospective buyers each rose five points, to 63 and 47, respectively. The index that measures expectations for future sales increased two points to 67.

Regionally, every area of the US saw builder confidence increase. On a three-month moving average basis, the Midwest registered a five-point gain to 59, the South posted a four-point increase to 56, the Northeast recorded a three-point gain to 41 and the West posted a two-point increase to 58.

Derived from a monthly survey that NAHB has conducted since 1984, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.