Though its momentum has cooled from these heady days, there’s no doubt that the fundamentals for the homebuilding industry continue to remain strong, and recent economic data has proven the doubters wrong. The latest new home construction figures for November came in at an 11.8% increase from last year and topped expectations. Similarly, the homebuilders’ confidence index has been above 80 for most of the year. Notably, this is a higher reading than the 90s or early 00s. These data points increase confidence that the housing bull market is in its early to middle innings rather than close to a terminal stage. Therefore, investors should consider buying high-quality homebuilders like Cavco (CVCO), Skyline Corporation (SKY), and Toll Brothers (NYSE:TOL).During the initial months of the pandemic and the beginning of 2021, demand for homes surged due to people eager to move out of urban areas and into suburban and rural areas and low mortgage rates. Following this initial wave, there were doubts that the housing market’s price appreciation would continue, as some anticipated an increase in inventories.
Though its momentum has cooled from these heady days, there’s no doubt that the fundamentals for the homebuilding industry continue to remain strong, and recent economic data has proven the doubters wrong. The latest new home construction figures for November came in at an 11.8% increase from last year and topped expectations. Similarly, the homebuilders’ confidence index has been above 80 for most of the year. Notably, this is a higher reading than the 90s or early 00s.
These data points increase confidence that the housing bull market is in its early to middle innings rather than close to a terminal stage. Therefore, investors should consider buying high-quality homebuilders like Cavco (CVCO), Skyline Corporation (SKY), and Toll Brothers (TOL).