Confidence among U.S. homebuilders is at its highest level in nearly eight years, fueled by optimism that demand for new homes will drive sales growth into next year.

The brighter sales outlook is the latest sign pointing to a sustained pickup in construction in coming months and comes as applications for permits to build single-family houses are at a five-year high.

The National Association of Home Builders/Wells Fargo builder sentiment index jumped to 59 this month from 56 in July. November 2005 was the last time the reading was higher.

A reading above 50 indicates more builders view sales conditions as good, rather than poor.

Measures of current sales conditions and builders' outlook for single-family home sales over the next six months each increased.

Copyright 2013 The Associated Press.