The NAHB/Wells Fargo Housing Market index rose four points to 19, the group said in a statement. Economists polled by Reuters had expected sentiment to edge up to 16.
A reading below 50 indicates more builders view sales conditions as poor than good. The index has not been above 50 since April 2006.
An expected surge in buyer activity leading up to the expiration of the home buyer tax credits and a gradually improving economy helped to brighten builders' view of the marketplace in April, said NAHB Chief Economist David Crowe.
Prospective homeowners have to sign contracts by the end April and close by the June 30 deadline to qualify for the popular tax credit.
The NAHB survey also showed all three subindexes of the Housing Market Index rose this month, but builders are uncertain about the future.
The current sales conditions gauge rose five points to 20, while the sales expectations measure for the next six months edged up one point to 25. The traffic of prospective buyers index rose four points to 14.
Greater economic growth, particularly in the job market, and the abatement of these housing issues are needed to help move home building to a more sustained recovery, said Crowe. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)