Chart of the Week
For the second month in a row, the NAHB* Homebuilder Confidence Index is rising above expectations. After bottoming out last December at 31, it reached 42 in February.
Housing construction project beginnings peaked last April and have since fallen 23%. Residential investment had already begun to sag between Q1 2021 and Q1 2022 due to increased construction delays, but between Q2 2022 and the last quarter, it fell sharply by 19%, subtracting 0.9% from the GDP.
The U.S. real estate market remains characterized by a relative scarcity of homes for sale and, more generally, by a historically low vacancy rate. While the sharp rise in mortgage rates may have paralyzed players last year, their stabilization seems to be giving them back some visibility. Other factors, such as the decline in the price of lumber to its lowest level since 2020, also point in the right direction.
A stabilization of the residential sector would confirm the strength of activity in the United States at the beginning of the year, which would reinforce the likelihood that the Fed will have to raise rates further to reduce inflationary pressures.
*NAHB : National Association of Home Builders.
The opinion expressed above is dated February 17, 2022 and is subject to change.
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