Is the Housing Market Starting to Rebuild?
We share the cautious optimism of America's homebuilders.
The coronavirus pandemic sapped the energy from a stellar start for 2020 homebuilding. Single-family starts were down about 20% in April and May, and multifamily construction fell by more than a third. Even though there should be a sequential improvement in June, it will be no picnic. As we enter the third quarter, however, we are cautiously optimistic about a gradual rebound in homebuilding.
Rock-bottom mortgage rates, a sharp rebound in homebuilder confidence, and recovering permit issuance are all signs that we may be passing the bottom. Mortgage rates sitting at record lows have brought ownership within reach for many Americans, especially after considering costly rental rates. This financial dynamic should support single-family home demand.
Charles Gross does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.