The National Association of Home Builders/Wells Fargo builder sentiment index climbed to 44 this month from 41 in April. It was the first increase since December.
Measures of customer traffic and current sales conditions also improved from April's reading.
Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.
Concerns over rising costs for land, building materials and labor have dimmed builders' confidence in recent months.
Regardless, steady job creation, near record-low mortgage rates and rising home values have spurred sales this year.