That famous line describes the current wonderful backdrop for housing and the overall U.S. economy. Many are wondering what lies ahead for housing as we enter 2020.
There are many reasons why the U.S. housing sector should do well for the foreseeable future, but here’s three main reasons for the bright outlook:
- Housing Starts are improving. This is especially true for single-family homes, which have risen for five consecutive months. This trend suggests anticipated buying demand.
- The labor market remains strong. Rates don’t buy homes, jobs do. 50+ year low unemployment at 3.6%, coupled with rising wages makes for a wonderful housing backdrop.
- Low home loan rates for longer than most expect. Rates don’t buy homes, but they definitely help more people participate in buying a home. With inflation running beneath the Fed target of 2.00% for the foreseeable future, there should be no upward pressure on home loan rates.
Bottom line: there is no recession in sight. The backdrop for housing is more of a Goldilocks scenario and makes for a wonderful time to purchase a home.
Forecast for the Week
The upcoming week is long on economic data, despite the Thanksgiving holiday on Thursday, and an abbreviated session on Friday.
All U.S. markets are closed on Thursday for Thanksgiving. On Friday, the bond markets close at 2:00 p.m. ET while stocks close at 1:00 p.m. ET.
All eyes will be on the inflation numbers from the Core PCE, the Fed’s favorite inflation gauge. Inflation has been running low and should continue to run low for the foreseeable future.
Investors will also receive data from the housing sector, manufacturing, consumer confidence, and spending, along with GDP data.
Reports to watch:
- Housing data will be seen from Tuesday’s S&P Case-Shiller Home Price Index and New Home Sales, followed by Pending Home Sales on Wednesday.
- Consumer Confidence will be released on Tuesday and has been running just beneath all-time high levels.
- Wednesday brings the Q3 2019 second read on Gross Domestic Product, Personal Income and Spending, Weekly Claims, Durable Orders, and the Core PCE.
On Friday, the Chicago PMI (manufacturing) report will be released.
Source: Vantage