The NAHB housing market index, a measuring of homebuilder confidence surged to 58 in December. This matches 2005 levels, according to Bloomberg.
This beat expectations for a rise to 55, and is up from 54 the previous month.
A reading over 50 shows that more builders think sales conditions are good rather than poor.
Homebuilders don't think the rise in mortgage rates has hindered homebuyers since rates are near historical lows. The rise was also attributed to pent up demand caused by the government shutdown.
"The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months," said National Association of Home Builders (NAHB) Chairman Rick Judson in a press release. "This indicates that an increasing number of builders have a positive view on where the industry is going."
"All three components of the housing market index (HMI) climbed in December. The index gauging current sales conditions jumped six points to 64. The index gauging expectations for future sales rose two points to 62. The index gauging traffic of prospective buyers gained three points to 44."
New home sales surged 25.4% in October but this just takes sales back to the pace seen in the first six months of the year.
Meanwhile, homebuilder sentiment has been decoupling from reality as housing starts have failed to keep up.
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