Low inventory may not be good for potential homeowners shopping for a home but it's keeping builders feeling a bit more confident that there are buyers eager for new single-family homes. 

This was the conclusion from the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) just released this month. This cautious optimism is in spite of the industry being realistic about working at a time when it's been hit with multiple challenges: higher mortgage rates, labor costs, more expensive materials (but lumber is back to pre-pandemic levels), sometimes still not enough inventory of certain products and systems and a scarcer supply of lots.

Overall, however, builder confidence for newly built single-family homes this month posted a one-point gain to 56, according to the HMI. This represents the seventh straight month that builder confidence has climbed and is the highest level since June of last year.