The National Association of Home Builders said their monthly builders confidence index reached 52 in June, climbing eight points.
Readings above 50 indicate more builders view sales as good than poor, the NAHB said.
The group called it a "major milestone," as it was the first time the index topped 50 since April 2006.
"Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," NAHB Chairman Rick Judson said.
NAHB Chief Economist David Crowe said the confidence index is consistent with the trade group's business forecast.
"Today's report is consistent with our forecast for a 29 percent increase in total housing starts this year, which would mark the first time since 2007 that starts have topped the 1 million mark," Crowe said.
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