As a limited supply of existing homes has fed interest in new construction, US homebuilder sentiment advanced to an 11-month high in June.

On Monday, figures showed that the National Association of Homebuilders/Wells Fargo gauge rose five points to 55. The index has exceeded all estimates from a Bloomberg survey of economists, after increasing for six consecutive months.

In a statement, NAHB chief economist Robert Dietz said, “A bottom is forming for single-family home building as builder sentiment continues to gradually rise from the beginning of the year. The Federal Reserve nearing the end of its tightening cycle is also good news for future market conditions in terms of mortgage rates and the cost of financing for builder and developer loans.”

Other metrics are also on the way up. The gauges of current sales, and prospective buyer traffic are both now at 11-month highs. Meanwhile the measure of sales expectations his hit its highest point since May of 2022.

According to the data, one quarter of builders told the survey they had cut their home prices to stimulate sales. That number declined by about 36% from November, which would point to a gradual recovery in demand. Roughly 56% of respondents utilized incentives to encourage sales this month, which was a slight increase over the prior month, however it was down 62% from the end of last year.

All four US regions saw builder sentiment rise. In the index reading, a measure of 50 is neutral, with any number below 50 indicating more builders view conditions as poor than good, and a reading over 50 indicating more view conditions as good than poor.

Homebuilding companies have seen shares rise this year, with PulteGroup Inc. increasing 61%, Toll Brothers Inc. up 47% and Lennar Corp. gaining almost 33%.

According to government data, single-family home sales are up 11.8% in April compared to one year prior.