WASHINGTON (

TheStreet

) -- The National Association of Home Builders' index of builder sentiment came in flat month-over-month as high unemployment continued to dissuade people from considering new-home purchases.

The NAHB said early Monday its confidence index, which measures builder perceptions of current single-family home sales and sales expectations for the next six months, held steady with a reading of 13 in September, disappointing industry watchers who expected the index to edge up to a reading of 14. Any reading below 50 points indicates poor sentiment.

"In general, builders haven't seen any reason for improved optimism in market conditions over the past month," said NAHB Chairman Bob Jones. "If anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy."

Stocks in the homebuilder sector were mostly higher Monday morning, thanks to a

better-than-expected quarterly report from builder

Lennar

(LEN) - Get Report

, posted before the opening bell Monday.

>>Lennar Beats on Return to Profitability

The

SPDR S&P Homebuilders

(XHB) - Get Report

, an exchange-traded fund that tracks the sector, gained 1.9% whilethe

iShares Dow Jones US Home Construction

(ITB) - Get Report

ETF added 2.1%.

D.R. Horton

(DHI) - Get Report

gained 2.9%,

PulteGroup

(PHM) - Get Report

2.7%,

Beazer Homes

(BZH) - Get Report

3.8% and

Toll Brothers

(TOL) - Get Report

1.8%. Lennar jumped 6.3%.

Hesitancy among potential home buyers was a key driver of builders' low sentiment, according to the NAHB report.

"It also reflects the frustration that builders are feeling regarding the effects that foreclosed property sales are having on the new-homes market, with 87% of respondents reporting that their market has been negatively impacted by foreclosures," said NAHB Chief Economist David Crowe.

There were nearly 339,000 new foreclosures in August, according to RealtyTrac, bringing the nationwide number of foreclosed homes to 1.98 million.

Earlier Monday homebuilder

Lennar said it returned to year-over-year profitability in the recent quarter, topping Wall Street's expectations.

Higher revenue and a greater number of home deliveries helped drive the builder's quarterly performance.

Lennar said third-quarter earnings were $30 million, or 16 cents a share, a reversal from a year-earlier loss of $171.6 million, or 97 cents. Analysts expected a profit of $7.1 million, or 5 cents per share.

Revenue rose 14.5% to $825 million, easily beating expectations for sales of $777.5 million.

Still, new-home orders fell by 15% to 2,624 homes after the expiration of the extended

federal tax credit for homebuyers

.

New home deliveries increased 9.4% to 2,909 homes in the quarter from 2,660 homes in the year-earlier quarter. At the same time, the average sales price of homes delivered increased to $240,000 from $239,000 a year earlier.

Earlier this month, industry peer Beazer Homes said it was

no longer sure new-home orders in fiscal 2010 would be higher than fiscal 2009's level of 4,205 homes

.

Beazer cited slower-than-anticipated improvements in new-home orders after the expiration of

homebuyers' tax credits

.

>>Beazer Homes: Hard Times Ahead

.

The company said prospective homebuyers continue to exercise caution in committing to a home purchase as general economic conditions still haven't showed enough improvement.

>>Top Homebuilder Stocks to Buy Now

.

The housing market saw sales ramp up in March and April as consumers rushed to take advantage of tax credits that offered as much as $8,000 for first-time homebuyers and $6,500 for repeat buyers. Following the expiration of those credits on April 30, the market saw a dramatic decline in demand for the month of May that spilled over into June. Data for July showed a further drop in demand. Lawmakers later extended the deadline to close on a home purchase and still qualify for the tax credit to Sept. 30.

>>We Need Another Homebuyer Tax Credit, Poll Says

.

-- Written by Miriam Marcus Reimer in New York.

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.

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