• Alex Pettee, CFA

Happy Homeowners | Fresh Records | Home Sales Surge

Updated: Sep 10, 2020

Daily Recap

  • U.S. equity markets finished higher Friday with the S&P 500 eclipsing fresh record-highs as another slate of stellar housing data provided further evidence that the economic rebound remains on solid-footing.

  • Ending the week higher by roughly 0.8%, the S&P 500 finished higher by 0.3% while the Dow Jones Industrial Average jumped 191 points and the Nasdaq 100 ETF rose 0.7%.

  • Ending the week lower by 0.4%, Equity REITs (VNQ) finished higher by 0.2% today with 9 of 18 property sectors finishing in positive territory. Mortgage REITs finished lower by 0.7%.

  • Existing Homes Sales surged by 24.7% in July from last month and rose nearly 9% from last year. This was the strongest monthly gain in the history of the survey which was the highest sales pace since December 2006.

  • The supply of existing homes dipped 21% from last year, representing a 3.1-month supply at the current sales pace, the lowest in the survey's history. Happy homeowners: strong demand and record-low supply drove home prices higher by 8.5% from last year.

Our Real Estate Daily Recap discusses the notable news and events in the real estate sector over the last trading day and highlights sector-by-sector performance. We publish this note every afternoon at HoyaCapital.com and occasionally on Seeking Alpha to cover significant news and events. Subscribe to our free mailing list to make sure you never miss the latest developments in the commercial and residential real estate sectors. You can also follow our real-time commentary on Twitter and LinkedIn.

U.S. equity markets finished higher Friday with the S&P 500 eclipsing fresh record-highs as another slate of stellar housing data provided further evidence that the economic rebound remains on solid footing. Ending the week higher by roughly 0.8%, the S&P 500 ETF (SPY) finished higher by 0.4% while the Dow Jones Industrial Average (DJI) jumped 191 points and the Nasdaq 100 ETF (QQQ) rose 0.7%. Ending the week lower by 0.4%, the Equity REIT ETF (VNQ) finished higher by 0.2% today with 9 of 18 property sectors finishing in positive territory. The Mortgage REIT ETF (REM) finished lower by 0.7% today and ended the week off by 2.7%.

The "stay-at-home" trade was revived this week as large-cap tech stocks, along with homebuilders and the broader Hoya Capital Housing Index continue to power the seemingly relentless equity market rebound since its lows in late-March. 7 of the 11 GICS sectors finished in positive territory today, led by the Technology (XLK), Consumer Discretionary (XLY), and Industrial (XLI) sectors. We'll have a full analysis and commentary on this week's trading action, as well as a full recap of another stellar slate of data in the economically-critical U.S. housing market, in our upcoming Real Estate Weekly Outlook report published tomorrow morning.

On that point, sales of Existing Homes surged by 24.7% in July from last month and rose nearly 9% from last year, according to data released today by the National Association of Realtors. This was the strongest monthly gain in the history of the survey and was the highest sales pace since December 2006. The dramatic rebound in housing market activity continues to be driven by the favorable tailwinds of historically low-interest rates and demographic-driven demand, tailwinds that have come amid a lingering and intensifying housing shortage. The supply of existing homes dipped 21% from last year, representing a 3.1-month supply at the current sales pace, down from 4.2-months last year, and the lowest in the survey's history. As forecast at the beginning of the pandemic, home prices have actually reaccelerated amid this favorable supply/demand dynamic with prices jumping 8.5% from last year.

To read the full report, click here to visit Seeking Alpha!

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