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Homebuilder activity has started to pick back up, now at record high levels, according to Alpha Stock Alert Research Analyst Clint Lee on Banyan Hill. Housing starts still have yet to return to their long-term average, most recently reported at 1.3 million units. Meanwhile, Freddie Mac states that the U.S. faces a housing shortfall of up to 4 million units, though builder confidence has hit new highs.
“And the problem will only worsen as the millennial generation starts to reach the peak age of first-time homebuyers, which is typically early 30s,” Hill said. “Fortunately, homebuilding activity has picked up. New home sales are now at their highest level since 2007.”
In BuildFax’s September Housing Health Report, Jonathan Kanarek, COO, BuildFax noted that the housing market is beating expectations, even with the threat of recession.
“Amidst concerns of a recession, it’s promising to see the housing market responding to the impact of mortgage rate decreases and other positive moves in the market,” he added. “If housing continues showing the promise of growth, or even a leveling off, this activity has the potential to stimulate the larger economy.”
Also aiding to the rally is the reported progress being made in trade negotiations between the U.S. and China.
“Of the S&P 500 companies that have reported over the last month, just 32 mention recession on their calls,” said Nick Mazing of Sentieo in the CNBC report.
Recent economic recovery has slowed talk of a recession, but Duke Professor Campbell Harvey, an expert on the yield curve, warned that the yield curve’s un-inversion in recent week should not be considered a “all clear” sign.
A recession may still be on the horizon, he told Business Insider. A negative spread between the three-month and 10-year Treasury yields—known as a yield-curve inversion—has precluded each of the seven economic recessions since 1950.
