Confidence among US homebuilders rose this month to its highest level in six and a half years.
Confidence levels were driven by strong demand for newly built homes and growing optimism that the housing recovery will strengthen next year.
The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46, up from 41 in October.
That is the highest reading since May 2006, just before the housing bubble burst.
Readings below 50 suggest negative sentiment about the housing market. The index last reached that level in April 2006. Still it has been trending higher since October 2011, when it stood at 17.
A measure of current sales conditions rose this month by 8 points to 49, the highest level since May 2006.
Meanwhile, US sales of previously occupied homes rose solidly in October, helped by improvement in the job market and cheap mortgages.
The National Association of Realtors said that sales rose 2.1% to a seasonally adjusted annual rate of 4.79 million. That is up from 4.69 million in September, which was revised lower.
The sales pace is roughly 11% higher than a year ago. But it remains below the more than 5.5 million that economists consider consistent with a healthy market.
Superstorm Sandy delayed some sales in the Northeast, the Realtors' group said. Sales fell 1.7%, the only region to show a decline. Most of the drop was due to the storm, but those sales will likely be completed in future months, the group said.
