U.S. homebuilders haven’t been this confident since before the turn of the millennium.
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Builder confidence rose by 5 points in December to 76, the highest reading since June 1999, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Homebuilding stocks were lower following the report's release.
“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde.
All three of the housing market index’s components gained in November. A gauge of current conditions rose 7 points while readings on sales expectations for the next six months and traffic of prospective buyers climbed 1 point and 4 points, respectively.
Conditions would be even better as a result of the unemployment rate being at a 50-year low and solid wage growth if not for “underbuilding due to supply side constraints like labor and land availability,” according to NAHB Chief Economist Robert Dietz.
“Higher development costs are hurting affordability and dampening more robust construction growth,” he said in the report.
Investors will receive more information on the housing market Tuesday when housing starts and building permits readings are set to be released. Economists surveyed by Refinitiv are looking for starts to have climbed 3.8 percent month-over-month to 1.314 million in November as building permits rose 5 percent to 1.461 million.
Things are looking good for next year thanks to low interest rates and the strong job market, NAHB President and CEO Jerry Howard told FOX Business’ Stuart Varney.
“We’re hoping for a big, big year next year,” he said.