Strong economic growth and low interest rates will create the perfect economic mix for a strong housing market in 2015, CNBC predicts in a recent article.
Evaluating the periods since 1980 when GDP was above 2%, yet the 10-year Treasury yield remained under 2.5%, CNBC found there has been about one year or four quarters of time when both these conditions were met and homebuilder stocks were the standouts among stocks in the S&P 500.
Housing stocks have “been unexciting and dull the past two years,” wrote Carter Worth, chief market technician for Sterne Agee, in a note to clients cited by CNBC. “We believe many homebuilding/home furnishing/building product stocks are about to come to life.”
Masco, which makes faucets, cabinets and windows, posted an 8.4% gain, on average, data show.
The yield on the 10-year Treasury was most recently at 2.2%, down from near 3% to start 2014.
“A revision of third-quarter GDP last week showed that growth was a monster 5%,” CNBC says. “Economists subsequently raised their expectations for 2015.”
Read the article here.
Written by Cassandra Dowell