There is no question that right now we are seeing some really wild things happening in the real estate and building sectors. Take a look for yourself.
October 14 (King World News) – There is a great deal of interest in what is happening in the real estate market in the United States. As you can see from the chart below, the number of new home sales recently broke over 1 million in a 30 day period for the first time in well over a decade.
1+ Million Home Sales In A 30 Day Period For
The First Time In Well Over A Decade
The big question right now is are we going into a period of sustained home sales above the 1+ million mark each month like we saw in the 2003-2006 time frame (highlighted in green in the chart above)?
We have seen seen tremendous strength in the S&P Homebuilding Index, which is at all-time highs. We are also seeing all-time highs on stocks like Lowes and Home Depot. And look at the strength in the S&P 500 Building Products Index, which is also at all-time highs (see below).
S&P 500 Building Index Hits All-Time High
The Bottom Line
The bottom line is that there is a lot of cheap money sloshing around the globe, including the United States. On top of that, we are seeing massive flight from major cities and poorly run states. That flight has created a real estate boom in other states such as Florida, Nevada, Texas, Washington, etc…
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So we are seeing two different markets when it comes to real estate. It will be interesting to see what happens with the real estate market in 2021 because there has been tremendous economic destruction and job losses that are not going to immediately come back, and that could take its toll long term, especially if interest rates were to rise. But for the time being, especially in certain states, it is still a sellers market.
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