Home-builder confidence rose to the highest level in more than 11 years in December on optimism that a Trump presidency will mean more people will be able to afford homes.
The National Association of Home Builders/Wells Fargo Housing Market Index rose to a reading of 70, up from last month’s 63 and the highest since July 2005. Builders are hopeful that Trump will follow through on promises to curb “burdensome” regulations that are hurting home affordability, the NAHB said.
Regulatory burdens have increased the cost of building homes by 29% in the past five years, NAHB Chairman Ed Brady said in a report on Thursday.
“Though this significant increase in builder confidence could be considered an outlier, the fact remains that the economic fundamentals continue to look good for housing,” NAHB Chief Economist Robert Dietz said. “The rise in the HMI is consistent with recent gains for the stock market and consumer confidence. At the same time, builders remain sensitive to rising mortgage rates and continue to deal with shortages of lots and labor.”