Home Builder Index at its peak in U.S. since October 2016

A private gauge on U.S. home builder sentiment unexpectedly rose in September 2016 to its strongest level in 11 months, prompted by renewed interest in home purchases following a summer lull.

The National Association of Home Builders and Wells Fargo said their index on builder confidence regarding newly built, single-family homes climbed to 65 points in September from a downwardly revised 59 in August.

This was matched the level set in October 2015.

The August figure was originally reported at 60.

Analysts polled by Reuters had forecast a September reading of 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, a home builder and developer from Bloomington, Illinois said in a statement.

Analysts say that an upswing in home sales should support the U.S. economic expansion and the view the Federal Reserve may raise interest rates by the end of the year.

In the latest survey, the measure on current sales expectations rose 6 points to 71, while the gauge on sales outlook in the next six months increased 5 points to 71.

The component on traffic of prospective buyers climbed 4 points to 48.

By region, the three-month average indexes showed the Northeast and South each booked a 1-point gain to 42 and 64, respectively, while the West increased 4 points to 73. The Midwest was unchanged at 55, NAHB said.