U.S. builder confidence in the market for newly built, single-family homes jumped in May, hitting the highest level since May 2007, a leading industry report revealed Tuesday.

The builder sentiment index rose 5 points to 29 from a downwardly revised reading in April, signaling an improving outlook for housing construction, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

Each of the HMI components rallied from declines in the previous month. The component gauging current sales conditions and traffic of prospective buyers both climbed 5 points to 30 and 23 respectively. The component gauging sales expectation in the next six months gained 3 points to 34.

Firming home values, improving employment and low mortgage are drawing housing consumers back, the association noted, adding that home building still has quite a way to go toward a fully healthy market.

Any reading below 50 indicates negative sentiment about the market. The index has not rebounded above that level since April 2006.

With constant modest improvement recently, the U.S. housing crash is said to be near the bottom. However, many economists hold that the market still needs years to recover entirely.