Stop the Fearmongering – Millennial Homebuying Trends Look Great

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The last few weeks, I’ve been beating the same drum with regards to the markets: Be patient.

Stop the Fearmongering - Millennial Homebuying Trends Look GreatI remain optimistic about U.S. stocks despite the recent roller coaster, especially when considering a longer investment horizon as most investors should be doing. A similar thesis holds true when we zoom in on the housing market.

Concerns about the housing market have been floating around for some time, especially with regards to millennials and their delayed home-buying habits.

But just as the recent blip in the broader market represents a great buying opportunity for a long-term trend, the recent lack of buying by millennials represents the pent-up demand and a strong investment thesis for a market that’s already gaining momentum.

I first expressed bullishness about the housing sector, specifically about Home Depot (HD), a few months ago. At the time, housing starts had increased at a pace not seen since before the recession — one of many reasons I said Home Depot stock had more room to climb.

That bullet point in the company’s bullish thesis goes far beyond just the home improvement retailer, of course. Such strong growth in housing starts exemplifies the growing demand of the housing market — driven by low mortgage rates, an improving labor market and the reality that the long-awaited millennial buying population seems ready to trickle into the market.

This optimism may surprise you considering there’s a lot of hand-wringing about up-and-coming generations’ buying habits. A great example is this recent headline from Quartz, reading “Millennials can’t afford to buy houses, even though the U.S. really needs them to”. This is the same kind of fear that’s circling the stock market more generally … and it needs to be taken with a grain of salt.

The U.S. economy will keep chugging along. The same holds true for the housing market.

Besides, consider this: A recent report found that at millennials currently make up the largest share of homebuyers, and make up more than two-thirds of first-time homebuyers. Plus, that’s just the beginning. As I recently told U.S. News & World Report, around 40% of millennials want to buy a house but haven’t done so yet, which translates to a market of 41 million first-time homebuyers.

This demand is already manifesting itself in continued strong housing data, including July’s 10% year-over-year surge in housing starts, a similarly impressive double-digit climb in existing home sales, and an even more impressive 26% climb in new home sales. Despite general concerns and fearmongering about millennials and housing, things are on the right track and should stay that way.

It will be a waiting game, of course, but all of investing is. I remain optimistic about the housing market’s momentum as millennials continue to become homebuyers.

You should remain optimistic (and patient) too.

Hilary Kramer is the editor of GameChangersBreakout Stocks Under $10High Octane Trader,Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/09/millennial-housing-homebuyers-home-depot/.

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