The National Association of Homebuilders (NAHB) announced on Monday its housing market index (HMI) came in at 76 in September, up from 75 in August. This marked the first increase since May.

Economists had forecast the HMI to drop to 74.

A reading over 50 indicates more builders view conditions as good than poor.

Two of three HMI components recorded gain this month. The indicator gauging current sales conditions went up one point to 82, and the component measuring traffic of prospective buyers increased 2 points to 61. Meanwhile, the measure charting sales expectations in the next six held steady at 81.

NAHB Chairman Chuck Fowke noted: “Builder sentiment has been gradually cooling since the HMI hit an all-time high reading of 90 last November. The September data show stability as some building material cost challenges ease, particularly for softwood lumber. However, delivery times remain extended and the chronic construction labor shortage is expected to persist as the overall labor market recovers.”

Meanwhile, NAHB Chief Economist Robert Dietz said: “The single-family building market has moved off the unsustainably hot pace of construction of last fall and has reached a still hot but more stable level of activity, as reflected in the September HMI. While building material challenges persist, the rate of cost growth has eased for some products, but the job openings rate in construction is trending higher.”