The National Association of Home Builders (NAHB) released its housing market index for the U.S. on Wednesday. The NAHB housing market index rose to 62 in September from 61 in August. Analysts had expected the index to remain unchanged at 61. It was the highest level since November 2005.

A level above 50.0 is considered positive, below indicates a negative outlook.

The increase was driven by a rise in two of three components of the index. The buyer traffic subindex rose two points to 47 in September, the current sales conditions subindex climbed one point to 67, while the subindex measuring sales expectations in the next six months declined to 68 from 70.

"Single-family housing is making solid progress. However, our members continue to tell us that they are concerned about the availability of lots and labour," the NAHB Chairman Tom Woods said.

"We expect housing to keep moving forward at a steady, modest rate through the end of the year," the NAHB Chief Economist David Crowe said.