Homebuilders: Rate Cuts Add Fuel To Resurgent Housing Market
Homebuilders - which helped to power the economy up the "wall-of-worry" last year - may be a significant beneficiary of the sharp plunge in long-term interest rates amid coronavirus concerns.
Mortgage rates breached historic lows this week, providing a tailwind for the US housing industry - and homeowners - that could be a silver-lining to offset a near-term economic slowdown.
After dipping nearly 40% in 2018, the combination of lower mortgage rates, strong demographic-driven demand, and lower construction materials prices sent homebuilders higher by 50% in 2019.
The housing market momentum has continued into 2020, capped off by a "perfect month" in February, defined as better-than-expected reports on all of the major housing data releases.
Millennials - the largest generation in American history - are coming full-steam into the single-family housing markets over the next decade during a period of historically low housing supply.