Analyst Note| Brian Bernard, CFA, CPA |
The coronavirus pandemic has wreaked havoc on the U.S. economy, and economic and political uncertainty are elevated. However, the housing market has been the bright spot of the economy, and many housing-related metrics have either returned to or exceeded pre-pandemic levels. Indeed, there's been a sharp V-shaped recovery in new- and existing-home sales, residential construction permits and starts, and homebuilder confidence. In our view, strong demand has been driven by record-low mortgage rates and suburban migration. We think that the latter has accelerated in the wake of stay-at-home mandates and civil unrest.