Builder confidence increased by 5 points in December to a level of 76 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index.
It is the highest confidence level reading since June 1999, according to NAHB.
“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,” NAHB Chairman Greg Ugalde stated.
Despite the high confidence levels, the industry is still underbuilding due to supply-side constraints such as labor and land availability, according to NAHB Chief Economist Robert Dietz.
“Higher development costs are hurting affordability and dampening more robust construction growth,” Dietz stated.
Confidence levels above 50 on the Housing Market Index are generally considered positive views of the state of the housing market, according to NAHB.
