The National Association of Home Builders (NAHB)/Wells Fargo housing market index for November jumped to 70, the highest index reading since July 2005. The reading handily beat the consensus forecast of 63 from a Bloomberg survey of economists.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. NAHB chairman Ed Brady attributed the jump in sentiment to a hope among builders that President-elect Donald Trump will “cut burdensome regulations that are harming small businesses and housing affordability.

The current sales conditions sub-index for December rose from 69 to 76 and the sub-index that estimates prospective buyer traffic rose 6 points, from 47 to 53. The sub-index measuring sales expectations for the next six months rose 9 points from 69 to 78.

The NAHB’s chief economist said:

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. The rise in the [index] 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.

In the NAHB’s regions, the three-month moving average index rose in all four regions. In the West, the index rose 2 points to 79; it rose 1 point to 67 in the South; 6 points to 51 in the Northeast; and 3 points in the Midwest to a score of 61.

The NAHB/Wells Fargo housing market index has remained in the 60-point range since June of last year. Prior to mid-2013 the index had not risen to 50 since mid-2006.

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