Housing starts jumped 4.8 percent in June to a seasonally adjusted 1.19 million annual rate, the NAHB said, citing government data.
Construction permits issued increased 1.5 percent to a seasonally adjusted 1.15 million annual rate, the association said.
National Association of Home Builders Chairman Ed Brady said the industry is generally healthy.
"This month's uptick in production is an indicator that the housing market continues to move forward," said Brady, a home builder and developer from Bloomington, Illinois. "At the same time, builders are adding inventory at a cautious pace as they face lot shortages and regulatory hurdles."
NAHB Chief Economist Robert Dietz said he does not expect major changes in the housing market this year.
"The June report is consistent with our forecast for a gradual but consistent recovery of the housing market," Dietz said. "Single-family production should continue to strengthen throughout the year, buoyed by job growth, new household formations and low mortgage interest rates."