With a firming job market helping to unleash pent-up demand for new homes, the National Association of Home Builders released a report on Wednesday showing that U.S. homebuilder confidence jumped to its highest level in almost nine years in September.
The report said the NAHB/Wells Fargo Housing Market Index jumped to a reading of 59 in September from 55 in August, while economists had expected the index to inch up to 56.
The much bigger than expected increase lifted the housing market index to its highest level since hitting 61 in November of 2005.
NAHB Chairman Kevin Kelly said, "Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction."
The sharp jump by the housing market index reflected increases by all three of the components that make up the index.
The indices gauging current sales conditions and traffic of prospective buyers each jumped five points to 63 and 47, respectively, while the index gauging expectations for future sales rose two points to 67.
The NAHB also said homebuilder confidence rose across every region of the country in September, with the report showing increases by the three-month moving average for each region.
Thursday morning, the Commerce Department is scheduled to release a separate report on new residential construction in the month of August.
Housing starts are expected to drop to an annual rate of 1.038 million in August after surging up to a rate of 1.093 million in August.
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