Home-builder confidence in the single-family home market remained at its highest rate since 1999 in January, according to the National Association of Home Builders/Wells Fargo Housing Market Index released Thursday.
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While confidence this month was one point lower than in December 2019, according to a press release from NAHB, the strong overall confidence rate over the course of the last two months highlights a healthy labor market.
"Low-interest rates and a healthy labor market combined with a need for additional inventory is setting the stage for further home building gains in 2020," NAHB Chairman Greg Ugalde, who builds homes in Connecticut, said in a statement.
High builder confidence levels could be the result of steady interest and "attractive mortgage rates," home builder association Chief Economist Robert Dietz said, adding that "builders continue to grapple with a shortage of lots and labor while buyers are frustrated by a lack of inventory, particularly among starter homes."
Homebuilders association President Jerry Howard argued that 2020 will be considered the "Roaring Twenties" in terms of the home-building market.
"We're poised for a great time, I can tell you that," he said during a Tuesday interview with FOX Business' Stuart Varney. "The recovery has been steady and consistent. We avoided the negative talk about a recession early last year. ... I was talking to my economist the other day, and he said there are no headwinds right now. There are some crosswinds, but there's nothing really holding us back."
The U.S. economy added 145,000 jobs in December, including 20,000 construction jobs, while the unemployment rate remained at 3.5 — its lowest rate since 1969. There is, however, still a large demand for construction workers.
Sixty-two percent of construction firms reported few or no qualified applicants and 46 percent cited the shortage of qualified labor as their top business problem.
"The inability to assemble work teams is a key contributor to the comparably lackluster performance of the construction industry as evidenced by the December figures," National Federation of Independent Business Chief Economist Bill Dunkelberg said on Jan. 10. "Owners are raising compensation in order to attract more qualified applicants to fill open positions."
FOX Business' Ken Martin contributed to this report.