Builders are ending 2016 feeling good about the U.S. home market.
The NAHB-Wells Fargo Housing Market Index hit its highest level since July 2005 in figures just released by the association.
For December, the index hit 70 on a 100-point scale. The numbers are the results of a survey of National Association of Home Builders members on the state of current single-family home sales and projections for the next six months.
"Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing," said NAHB chief economist Robert Dietz. "The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor."
NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Illinois, credited the recent presidential election with increasing builders’ confidence.
"This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability," Brady said. "This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years."