Homebuilder confidence hits highest level since 2005

Homebuilder confidence hits highest level since 2005
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Homebuilder confidence soared in March to a nearly 12-year high on promises that President Trump will slash regulations.

Sentiment in the market for newly built single-family homes jumped six points to 71, the highest reading since June 2005, which was well before the housing and financial crisis, the National Association of Home Builders reported on Wednesday.

"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, a home builder and developer from Kerrville, Texas.

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Any reading over 50 signals positive sentiment.

All three NAHB/Wells Fargo Housing Market Index (HMI) components posted robust gains in March. 

The component gauging current sales conditions increased seven points to 78 while the index following sales expectations in the next six months rose five points to 78.  Meanwhile, the buyer traffic component increased eight points to 54.

The three-month moving averages for regional index scores saw the Midwest's pop up three points to 68 while the South's rose one point to 68. The West fell three points to 76 and the Northeast dropped one point to 48.

"While builders are clearly confident, we expect some moderation in the index moving forward," said Robert Dietz, NAHB's chief economist.

"Builders continue to face a number of challenges, including rising material prices, higher mortgage rates and shortages of lots and labor," he said.