We’ve seen plenty of evidence of a stronger housing market, with double-digit, year-over-year price increases for about six straight months. Helped by low inventories, home builders’ confidence is near an eight-year high according to the National Association of Home Builders. The housing market has had quite a run in the past year and a half, even with the last few months bringing increased mortgage rates.
Going forward, we believe the pent up demand from the millennial generation will support the housing market. Research has shown about 20% of men and 10% of women age 25-34 are currently living with their parents. As the job market continues to improve, we expect to see this generation creating new households, which means more home buyers than sellers.
Mortgage rates, while not at all-time lows are still very attractive. It is still a good time to buy a home. Currently, inventories remain low. Existing homes are 8% lower than last year, with slightly more than a five-month supply on the market. The inventory of new homes is at just under a four-month supply. Additionally, the foreclosure rate has fallen to about 3.3%—nearly a third of its peak of 4.6% in 2010. With banks’ willingness to write mortgages rising to 5.8%, we believe the millennial generation is in a prime spot to push the growth in the housing market higher.
At Henssler Financial, we have exposure to the housing market in multiple ways. We hold exchange-traded funds that include builders, materials and lumber companies, and retailers Home Depot and Lowe’s that service the housing market.
If you’d like to know more about the housing market, the experts at Henssler Financial are here to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
