The National Association of Home Builders (NAHB) Housing Market Index, which is a near real-time read on builder confidence, rose five points to 55 in June. Any reading above 50 on this index, which runs from 0 to 100, signals expansion while readings below 50 signal contraction. June’s reading marks the sixth straight month this measure has increased and is the first time that sentiment has moved into positive territory since last July.

All three components of the index (which include current sales conditions, sales expectations for the next six months, and buyer traffic) posted gains, with both current and future sales above 60 for the first time in a year.

What’s the bottom line? The NAHB noted that the lack of existing home inventory, improving supply chains, and solid demand among buyers are key factors in the rising optimism among home builders. NAHB Chief Economist Robert Dietz added, “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year.”