The National Association of Home Builders/Wells Fargo Housing Market Index reached its highest reading since July 2005 as builder confidence in the U.S. jumped in December.

The HMI for newly-built single-family homes increased seven points to 70, after remaining unchanged in the previous month.

NAHB Chairman Ed Brady said in a release that the rise was mostly attributable to a postelection bounce, as builders hope President-elect Donald Trump will follow up on his pledge to slash burdensome regulations that harm housing affordability.

"This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years," Brady said in a statement.

All three HMI components saw healthy increases in December, with the index measuring sales expectations for single-family homes in the next six months leaping nine points to 78. The component measuring current sales conditions increased seven points to 76. The component gauging buyer traffic increased six points to 53, marking the first time it crossed the 50 mark since October 2005.

Any number over 50 on the indexes indicates that more builders see conditions as good rather than poor.

The three-month moving average for the HMI logged a gain of six points in the Northeast to 51. The Midwest saw a three-point increase to 61. The South posted a one-point increase to 67 and the West saw a two-point gain to 79.