USA residence builders' confidence surged to a four-month high this month, with mortgage rates expected to decrease, boosting optimism for new home demand over the next year. The National Association of Home Builders (NAHB)/Wells Fargo & Co indicator measuring housing market conditions rose to 43 in October, marking the second consecutive monthly increase. The data exceeded the median expectation of economists surveyed by Bloomberg, which was 42. All three sub-indicators of the index increased. The outlook for the next six months rose to the highest level since April, while the potential buyer traffic indicator and current sales indicator also improved. "We expect mortgage rates to unevenly decline over the next few quarters, which will improve housing demand but also put pressure on development and construction land supply, as lending conditions for development and construction loans tighten," said NAHB Chief Economist Robert Dietz in a prepared statement. Builders are already anticipating the arrival of the key spring sales season, expecting the decrease in borrowing costs to bring new customers to the market.