The National Association of Home Builders’ (NAHB) and Wells Fargo’s monthly measure of builder confidence and market conditions climbed five points, to 76, in December, the highest level it’s been since 1999, according to data released Monday.

“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” NAHB Chairman Greg Ugalde, said in a statement.

HMI is a weighted average of separate indices for three single-family data points. It asks respondents to rate the market conditions for the sale of new homes at present and in the next six months, as well as the traffic of prospective buyers of new homes. It falls in a range of 0-100.

All three indices registered gains in December. The index measuring current conditions rose to 84, the component measuring expectations in the next six months rose to 79 and the measure of the traffic of prospective buyers rose to 58.

“While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability,” NAHB Chief Economist Robert Dietz said, in a statement. “Higher development costs are hurting affordability and dampening more robust construction growth.”

Email Patrick Kearns

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