Meanwhile, homebuilders are still on the road to full recovery. While housing starts jumped to about 1.1 million homes last year, fundamentals like population growth and so-called scrappage suggest a normal rate of 1.5 million new homes, according to the First Trust economists.
Looking ahead, with the Federal Reserve starting to normalize interest rates, albeit at a gradual pace, more Americans may take the signal as a sign to look for cheap financing while they still can. The Fed passed on raising rates earlier this month.
“Two factors—low inventories and tight credit—will limit the gains we will see in 2016. However, given the level of pent-up demand evident in web activity and stated buyer intentions for 2016, we should see this spring materialize as the busiest season of sales since 2006,” according to a note from Realtor.com economist Jonathan Smoke posted by Barron’s.
SPDR S&P Homebuilders ETF
