Residential Housing Market is Worth $35-T, America’s Biggest Industry

Residential Housing Market is Worth $35-T, America’s Biggest Industry

#housing

$DIA $SPY $QQQ $RUTX $ITB $VXX

Last month, US new home sales spiked 55%, their biggest gainer since Y 2005. The number of Americans looking to refinance their mortgages spiked 111%.

And Quicken Loans (Private), the America’s largest mortgage broker just posted its best Quarter in its 35-yr history.

In 1-H of Y 2020, Quicken funded a record $120-B in home loans. It broke the record for its best lending year ever with 6 months to run.

And get this: last month, the average home sale price spiked 6%. This marks 100 months running of gains, according to the National Association of Realtors (NAR).

According to NAR, 40% of US homebuyers was a millennial in Y 2019. And recent data from Realtor.com found millennials’ share of mortgages surpassed 50% in the Spring.

That means that a whole generation of homebuyers will soon enter the market. At a time when there is a massive shortage of homes in America.

Remember that the most important driver of home prices is supply and demand, and the supply is tight. And with record numbers of house hunters entering the market, it guarantees the housing boom has many years to run.

Homebuilders MUST build more houses. As I mentioned, builders have been very cautious over the past decade. But now they’re finally ramping up.

Before C-19 coronavirus chaos lockdowns, new home “starts” rose to their highest marks since Y 2006.

The number of building permits granted shot up to their highest marks since March 2007.

Note: Coronavirus has been little more than a blip on the radar for homebuilders. Housing starts surged 17% in June as states began reopening.

The Kicker: the shortage of available homes is allowing homebuilders to charge a premium.

The Bottom Line: Homebuilders are set to make huge money in Ys 2020, 2021, and beyond. Builders dove deep along with the market in March, but now they driving higher and setting up to break out to new all-time highs.

Check out the performance of homebuilder’s fund ITB (NYSEArca:ITB). It’s up 100% in only 4 months.

Tuesday’s US stock market action

DJIA +164.07 at 26828.47, NAS Comp +38.37 at 10941.24, S&P 500 +11.90 at 3306.51

Volume: Trade on the NYSE came in at 863-M/shares exchanged

Gold +34.70 +1.7% at 2,021.00oz, .DXY -0.2% to 93.37, WTI Crude Oil +1.6% +$0.66 at 41.68 bbl

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish with a Very Bullish bias.

  • NAS Comp +21.9% YTD
  • S&P 500 +2.3% YTD
  • DJIA -6.0% YTD
  • Russell 2000 -9.1% YTD

Industry Watch Strong: Energy, Utilities, RE, Materials

Weak: Healthcare, Financials

Moving the Market

Stock market closes at session highs

Longer-dated Treasuries advance

Looking Ahead: Investors will receive the ADP Employment Change Report for July, the Trade Balance report for June, and the weekly MBA Mortgage Applications Index Wednesday

Have a healthy day, Keep the Faith!

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Paul Ebeling

Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he it the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.