Builders' confidence in the market for new single-family homes jumped as the National Association of Home Builders' housing market index grew to 71 in March from 65 in February.
The 71 reading is the highest since June 2005.
Thomson Reuters' poll of economists predicted the index would be 65.
"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," NAHB Chairman Granger MacDonald said.
"While builders are clearly confident, we expect some moderation in the index moving forward," according to NAHB Chief Economist Robert Dietz. "Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor."
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
The current single-family home sales index rose to 78 from 71, the sales expectations index for the next six months increased to 78 from 73; and the traffic of prospective buyers index gained to 54 from 46.
