The National Association of Home Builders (NAHB) released its housing market index for the U.S. on Monday. The NAHB housing market index rose to 64 in October from 61 in September, exceeding expectations for an increase to 62. It was the highest level since 2005.

September's figure was revised down from 62.

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 remained unchanged at 47 in October, the current sales conditions subindex rose to 70 from 67, while the subindex measuring sales expectations in the next six months climbed to 75 from 68.

"The fact that builder confidence has held in the 60s since June is proof that the single-family housing market is making lasting gains as more serious buyers come forward," the NAHB Chairman Tom Woods said.

"With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015," the NAHB Chief Economist David Crowe said.