Builder confidence surged in November despite supply-side challenges, marking the third monthly increase in a row, the National Association of Home Builders reported, citing the latest NAHB/Wells Fargo Housing Market Index.

November’s reading of 83 was up three points from October, driven by low existing inventories and strong buyer demand, the NAHB said in a press release.

The index’s measure of current sales conditions also showed builder optimism, rising three points to 89, while the six-month sales-expectations measurement was flat at 84. The buyer-traffic component rose three points to 68.

Regionally, the three-month moving average of the index jumped four points each in the South and the Midwest to 84 and 72, respectively, while it rose one point to 84 in the West. The reading was down two points to 70 in the Northeast

The NAHB/Wells Fargo survey measures builder perceptions of current single-family home sales, as well as sales expectations for the next six months, as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” The results are then used to calculate a seasonally adjusted index in which any number over 50 indicates that more builders view conditions as good than poor.