Home Builder Confidence increased to 70 in December, from the 63 in November, reaching the highest level since July 2005, according to the National Association of Home Builders (NAHB).
“This significant increase in builder confidence could be considered an outlier,” said Robert Dietz, the chief economist of NAHB. However, he added that the rise is in line with the recent gains in the stock market and consumer confidence.
All of the sub-gauges of the index rose this month. Measure of six-month sales outlook rose to 78, which is the best result since June 2005 when the number was 69. The current sales gauge was up to 76 from 69, also reaching the 11-year high. In addition, the index of prospective buyer traffic increased to 53 from 47, which is the first time the traffic index surpasses 50 since the bubble’s peak nearly a decade ago. For the whole year of 2016, the housing-market index has an average of 61.
The increase is a sign of the confidence in president-elect Donald Trump, and indicates that homebuilders hope Trump administration would reduce regulation and taxes to provide more support to the industry.
“This notable rise in builder sentiment is largely attributable to a postelection 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,” said Ed Brady, the chairman of NAHB.