The latest data on existing homes showed sales edged higher in May, coming partly as banks saddled with foreclosed properties dropped prices to rid themselves of inventory.
The process was seen as the first step in forming a bottom for the housing market, but widespread forecasts for falling home prices through 2009 will likely drive more foreclosures, analysts said.
Home builder shares that have been drubbed for 18 months rose on Wednesday.
The Dow Jones Home Construction Index bounced 5 percent from its lowest level in years to 252.02.
The NAHB called on Congress to help clear the market of unsold homes by including in legislation a provision that would give first-time homebuyers an $8,000 tax credit.
Earlier Wednesday, an industry group said U.S. mortgage applications rose for a third consecutive week, reflecting an increase in demand for home loan refinancing as interest rates plunged.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.7 percent to 522.2 for the week ended July 11.
While the increase was modest, the report offers a glimmer of hope for a U.S. housing market that is suffering one of the worst downturns in its history.
Significantly tighter lending standards and an unwieldy supply of homes for sale are just some of the factors preventing the U.S. housing market from recovering from its two-year-long slump.
The frenzy of foreclosures hitting the market is aggravating matters, adding supply and depressing home prices nationwide, analysts say.