In recent analysis, a JPMorgan strategist pointed out significant indicators of a housing market on the mend. With 1.6 million new homes currently under construction and housing completions reaching their highest point in 17 years as of February, there’s reason for optimism.
Stephanie Aliaga, Global Market Strategist at JPMorgan, noted the market’s resilience despite challenges. She highlighted that while the housing sector initially struggled amidst rising Fed rates, recent data suggests a turnaround in activity.
Aliaga emphasized a thaw in supply, attributing it to a gradual increase in existing homes for sale since the previous spring. Moreover, the National Association of Realtors® reported a notable 9.5% surge in existing home sales between January and February, accompanied by a slight uptick in unsold inventory.
Looking ahead, analysts foresee continued growth in construction driven by robust job expansion and positive sentiments among homebuilders. However, they caution that the recovery may be tempered by affordability concerns arising from rapid home price appreciation outpacing income growth.
Despite these challenges, there’s optimism regarding mortgage rates, with forecasts indicating a potential decrease to 6.4% by the end of 2024, according to Fannie Mae. Aliaga concludes that while the housing market’s recovery may be gradual, its underlying dynamics suggest resilience rather than vulnerability for the economy.
Source: Fortune (04/01/24) Botros, Alena