US: Persistent recovery in the housing sector in recent years - Rabobank

Philip Marey, Senior US Strategist at Rabobank, notes that the US housing starts rebounded by 4.8% month-on-month in June after a step back in May (-1.7% MoM).

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“Meanwhile, building permits – a more forward looking indicator of residential investment – accelerated to 1.5% from 0.5%. Low interest rates, positive employment growth, rising real disposable income and increasing household formation continue to support the housing market recovery.

Last week, the Fed’s Beige Book noted that real estate activity continued to strengthen and banks reported overall increases in loan demand. Earlier this week, the NAHB homebuilder confidence index for July took a small step back to 59 from 60 in June. However, it remained above the 58 level of February through May, and well above the neutral level of 50. While the recovery in the housing sector has been slow since the Great Recession, it has been persistent in recent years."