Homebuilder confidence came in at 68 points in September, rising from August’s upwardly revised reading of 67, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

According to the index, September’s level now marks the highest reading since October of last year.

“Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor,” NAHB Chairman Greg Ugalde said.

In September, the index measuring current sales conditions rose from 73 to 75 points, while buyer traffic remained unchanged at 50. However, expectations over the next six months fell a single point to 70.

“Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” NAHB Chief Economist Robert Dietz said. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China. NAHB’s Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.”

That being said, the three-month moving averages for regional HMI scores show the Northeast grew from 57 to 59 points, the South moved one point from 69 to 70, the West increased two points to 75 and the Midwest held steady at 57 points.

NOTE: The NAHB/Wells Fargo Housing Market Index gauges builder opinions of single-family home sales and expectations, asking for a rating of good, fair or poor. Builders are also asked to rate prospective buyer traffic from very low to very high. The scores are used to calculate a seasonally adjusted index with a rating of 50 or over indicating positive sentiment.