The housing market isn’t slowing down anytime soon – CNN

December 16, 2021 by No Comments

Home improvement retail giant Lowe’s (LOW) issued a disappointing sales outlook Wednesday morning. Meanwhile, home builder Lennar (LEN) reported results Wednesday afternoon that missed forecasts. The company cited supply chain issues and higher lumber costs. Lennar shares fell 4% Thursday.But before you start shouting from the rooftops of the arguably overpriced home you live in that the housing bubble is bursting, consider this: The government reported Thursday morning that housing starts and building permits in November both rose more than expected from October levels.

In other words, consumers still want to buy new houses and live the proverbial suburban American dream, especially since Covid-19 is still a major concern.

“Demand is obviously not a problem, as evidenced by the recent increases in sales, [mortgage] applications and homebuilder sentiment,” said Jefferies economists Thursday. “If anything, Omicron should cement housing demand, by demonstrating that the pandemic is far from being over.”

Lennar seemed to suggest as much in its earnings report. The outlook for builders still seems solid. Lennar said that its backlog of homes increased 26% in the quarter.

Housing stocks continue to surge…and so are home prices

It’s also worth noting that even though Lennar’s stock fell a bit Thursday after releasing earnings, it remains near record highs. And it’s not the only housing stock that has thrived in 2021.

Builders Toll Brothers (TOL) and D.R. Horton (DHI) are also trading near all-time high levels, as is home leasing real estate investment trust Invitation Homes (INVH). Lowe’s recently hit a record high, too, and rival Home Depot (HD), the top performing Dow stock this year, is close to one as well. The SPDR S&P Homebuilders ETF (XHB), which owns shares of most of the major builders as well as suppliers and retailers, is up nearly 50% this year.

So it looks like investors in housing stocks may be benefiting as much from the continued boom as home sellers are.

Real estate brokerage Redfin reported this week that housing prices continue to skyrocket. The company said that said the median home sale price as of December 12 was up 14% from a year ago to $359,750, just below the all-time high from late November. Redfin (RDFN) added that demand is higher than supply, with the …….

Source: https://www.cnn.com/2021/12/16/investing/housing-market-economy/index.html

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