Homebuilder confidence in the U.S. jumped to its highest level in almost twelve years in the month of March, according to a report released by the National Association of Home Builders on Wednesday.
The report said the NAHB/Wells Fargo Housing Market Index surged up to 71 in March from 65 in February. Economists had expected the index to inch up to 66.
With the much bigger than expected increase, the housing market index reached its highest level since hitting 72 in June of 2005.
"Builders are buoyed by President Trump's actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting," said NAHB Chairman Granger MacDonald.
The jump by the housing market index came amid significant increases by all three of the components that make up the index.
The component measuring buyer traffic spiked eight points to 54, the component gauging current sales conditions jumped seven points to 78 and the index charting sales expectations in the next six months climbed five points to 78.
"While builders are clearly confident, we expect some moderation in the index moving forward," said NAHB Chief Economist Robert Dietz. "Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor."
Thursday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of February.
Housing starts are expected to climb to an annual rate of 1.270 million in February after tumbling to a rate of 1.246 million in January.
by RTT Staff Writer
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