Housing Is A Booming Industry During The Pandemic

When the pandemic hit home and the Federal and State governments ‘shut down’ the country and U.S. economy in March, some industries were predictably going to perform well. The ‘stay at home’ stocks and technology companies or the online and big-box retailers that had web presence where obvious smart plays during a time when social distancing and avoidance of large public places was going to be for the foreseeable future. However, due to government policies, primarily low-interest rates, the housing industry has also become a powerful economy sector.

In August, existing-home sales were up 10.5% year-over-year at a seasonally adjusted annual rate of 6 million units. In August, new home sales hit 1 million units, which represents a 43.2% increase compared to August of 2019. If current sales rates continue as they have been, unsold inventory is just three months of supply, which ties December of 2019 for the lowest level we have seen in the last 20 years.

In hindsight, it makes perfect sense, but during the stock market crash in March and the fact that for the most part, the vast majority of American’s were stuck at home, it was hard to predict that the housing industry would boom in the middle of a pandemic. However, that is exactly what has happened, and as I mentioned, looking back now, it is obvious why housing would boom at a time like this. People are stuck at home and realize how much they don’t like their home, or they were living in densely populated cities and want to move to the suburbs and have more space.

With the unknown of how much longer Covid-19 and the pandemic will disrupt life as we knew it, there are a few housing-related Exchange Traded Funds that you may want to consider owning as a way to catch a piece of the housing boom, without investing directly into real-estate yourself. Continue reading "Housing Is A Booming Industry During The Pandemic"

Housing Starts Down In September A Sign You Should Buy Housing Related ETF

Matt Thalman - INO.com Contributor - ETFs

Housing starts for September came in at 829,000 units, lower than the 851,000 units reported in August. Some economist and market participants are saying the weak housing starts are a sign the economy is beginning to show signs of wear.

Others have noted that 15.3% of the decline in starts came from parts of the country that were affected by hurricane Harvey and Irma. Furthermore, we can't forget about the wildfires in California, which may not be as impactful as the hurricane's, but still likely played some role in the decline.

Another data point that points to the health of the housing market is the National Association of Home Builders reported their Housing Market Index. In March of this year, the National Association of Home Builders reported their Housing Market Index hit a 71, just one point lower than its all-time high of 72 which was set in June of 2005. If you recall, shortly after June 2005 the housing bubble began to burst, and the housing crisis took down the U.S. economy. The NAHB report their Housing Market Index was at a 68 in October.

What is again interesting about these data point is that when the NAHB's Market Index hit its all-time high in 2005, the housing starts number was at 1.8 million.

Home builders have cited land and labor shortages for the 'low' number of housing starts. This could be a big problem for those looking to buy a home in the future because it could cause prices to skyrocket. But at the same time, that doesn’t mean the home builders will be making money hand over fist because remember their cost is going higher. Continue reading "Housing Starts Down In September A Sign You Should Buy Housing Related ETF"