Confidence among the nation's homebuilders jumped unexpectedly in December on expectations for a stronger economy. A monthly reading of homebuilder sentiment rose 5 points to 74. This is the highest reading since 1999.
Fifty is the line between positive and negative sentiment on the National Association of Home Builders' index. November's reading was revised lower by 1 point.
Sentiment stood at 69 in December 2016.
"Housing market conditions are improving partially because of new policies aimed at providing regulatory relief to the business community," said NAHB Chairman Granger MacDonald, a homebuilder and developer from Kerrville, Texas.
Homebuilders had been vehemently opposed to the Republican tax plan, which is set for a final vote in Congress this week. Changes to both the mortgage interest deduction and property tax deductions were seen as removing some of the benefits of homeownership. Apparently, builders now see the business incentives in the plan as outweighing those other negatives.
Of the index's three components, buyer traffic jumped 8 points to 58. Current sales conditions rose 4 points to 81. Sales expectations in the next six months increased 3 points to 79.