5 Charts to Prove the America 2.0 Housing Boom Is Happening Now
Special Note: We receive a lot of great and helpful feedback from readers just like you. When you take the time to write in, we listen. And this week, we received an encouraging email from Chuck from Huntsville, Alabama.
Hi Paul. I’m an Inner Circle subscriber and have been using your services since 2017. You may see me on Twitter from time to time, liking your tweets, et cetera. I really enjoy the charts that Amber posts as well. A picture paints a thousand words, and Amber’s charts are outstanding. I love your videos as well.
Thank you, Chuck, for writing in! We appreciate you very much. That’s why I’m pleased to report your feedback is the inspiration for today’s article.
Real estate is in my DNA.
I come from a family of tried-and-true long-term investors in real estate.
So when Paul Mampilly revealed America 2.0 — the Fourth Industrial Revolution — I knew I had to dive into how this economic upgrade would play into real estate.
And thanks to Chuck, I’m actually going to show you what I’ve found. I’m going to share five incredible charts to paint the picture of America 2.0 unfolding in real estate.
Then I’m going to tell you how to take advantage of this market before it soars in 2020.
America 2.0 and Real Estate: 5 Proof Charts
Recently, Paul spoke about how millennials and Generation Z are starting to buy and build homes for their own families.
This generational evolution will be a major boom for the housing industry.
Take a look.
America 2.0 Proof Chart No. 1:
From 2012 to 2019, nearly 10 million millennial households were created, but only 5.9 million single-family homes were built.
This means the U.S. housing market is short 3.84 million new homes.
This shortage spells big opportunity for homebuilders and rising homebuilding stocks.
America 2.0 Proof Chart No. 2:
The next timely proof chart shows us absolutely amazing news from the housing market.
Month-over-month housing starts — or the beginning of construction for a new home — skyrocketed 17% in December to a 1.6 million annual rate.
Economists were expecting a paltry 1.1% increase.
A 17% increase is absolutely mind-boggling and the highest reading in 13 years.
America 2.0 Proof Chart No. 3:
As this next chart shows, U.S. new-home sales recently completed the best quarter of the expansion.
And it was the strongest showing since 2007.
Per Bloomberg, “U.S. market for new homes sprang to life in the fourth quarter [of 2019], with contract signings reaching an expansion-best 699,000 units on an annualized basis.
“Favorable borrowing costs, income growth and a sturdy labor market are combining to fuel demand. New-home sales advanced for an eighth-straight year in 2019, and the fourth-quarter gain highlights a pickup in residential investment that will contribute to economic growth.”
America 2.0 Proof Chart No. 4:
Even though it’s the middle of winter, the U.S. housing market is bringing the heat.
Sales of previously owned homes rose higher in December 2019 to the quickest annualized rate since early 2018.
The positive economic statistics we discuss at Bold Profits are contributing factors to this rise.
Historically low mortgage rates and steady wage growth since the Great Recession have “left inventory at its lowest in records back to 1999 and pushed asking prices up by the most since early 2016,” per Bloomberg.
America 2.0 Proof Chart No. 5:
This last chart shows how homebuilders are brimming with confidence.
The National Association of Home Builders (NAHB) recently reported that its index — measuring homebuilder confidence — leaped to a 20-year high in December.
NAHB states this high is supported by “a low supply of existing homes, low mortgage rates and a strong labor market.”
Also, a positive new-housing demand outlook, increased new-home purchases and more and more potential homebuyers visiting new model homes are all adding fuel to this homebuilder confidence boost.
The 2 Best Ways to Profit From America 2.0’s Housing Boom
This macro view of the real estate world through the lens of America 2.0 tells me the industry is primed to take off.
As Paul always says, the best time to get in is before the crowd. That time is now. America 2.0 is happening. So, here are two ways to get in today:
- Line yourself up at the forefront of America 2.0. The evidence of this economic upgrade continues to pile up. Check out Paul’s forecast for it here, including his No. 1 stock pick for 2020.
- Play the Generation Z and millennial housing construction boom by investing in the iShares U.S. Home Construction exchange-traded fund (BATS: ITB). ITB offers exposure to this trend. It has a lot of momentum, and it’s a great option for investors to ride the wave of the America 2.0 housing boom.
We continue to urge our readers to learn more about our take on America 2.0 and the Fourth Industrial Revolution.
Until next time,
Director of Investment Research, Banyan Hill Publishing
I’ve been investing for more than 25 years. I started my career on Wall Street in 1991 as an assistant portfolio manager at Bankers Trust. I quickly advanced to prominent positions at Deutsche Bank and ING, managing multimillion-dollar accounts. In 2006, the owners of a $6 billion firm named Kinetics Asset Management recruited me to manage their hedge fund.