The National Association of Home Builders/Wells Fargo builder sentiment index increased to 40, up from 37 in August.
That's the highest reading since June 2006, just before the housing bubble burst.
Any reading below 50 indicates negative sentiment about the housing market.
The index hasn't reached that level since April 2006, the peak of the housing boom. But a measure of builders' outlook for sales in the next six months rose to 51.
That's up from 43 in August and also the highest level since June 2006. The survey is based on responses from 445 builders. It has been trending higher since October.
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