U.S. homebuilders are the most confident they've been in two decades as an improving economic backdrop propped up the key sector through the end of 2019.

The National Assn. of Home Builders/Wells Fargo Housing Market Index soared 5 points to hit 76 in December, according to data released Monday. The reading is the highest since June 1999.

Economists surveyed by Bloomberg expected the index to hit 70 in December. Any reading over 50 represents homebuilder optimism, and readings under 50 symbolize a more negative outlook.

Consumer traffic and robust sales both notched their best scores since the late 1990s and drove the housing index higher. The measurement of prospective buyer interest jumped four points to 58. NAHB's metric for current sales conditions rose seven points to 84.

The latest reading arrives as a trio of Federal Reserve rate cuts pushed mortgage costs lower through the end of the year. The latest jobs data also pointed to the US labor market remaining strong amid trade tensions and a lagging manufacturing sector.

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