Real Estate Rally Continues As Mortgage Rates Pull Back
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- What shutdown? The rally continued for US equities as the major indices notched their fourth straight week of gains. The S&P 500 has jumped 14% since bottoming in December.
- Real estate and housing-related equities continue to lead the rally in 2019. REITs are up more than 6% this year, while the Housing Industry Index is up nearly 9%.
- Housing starts and new home sales data continues to be delayed by the shutdown. Indications are that single-family home sales significantly weakened in the final quarter of 2018.
- After a dismal end to 2018, housing data is showing signs of life. The MBA Purchase Index, a leading indicator of home sales, climbed to the highest level since 2010.
- Corroborating the sensitivity of single-family housing demand to mortgage rates, homebuilder sentiment improved in December despite volatile financial markets. Rates, however, remain at the upper-end of the post-recession range.