Joshua Brown, a writer for Fortune Magazine, put together 10 reasons that the single-family home market will take off this spring.

  1. FOMO (Fear of Missing Out)
    1. Essentially, it’s “now or never” in terms of borrowing to purchase a home because of the possibility that “zero interest rate party” may come to an end soon.
  2. There is pent-up demand for single-family housing due to the uptick in the 35-39 year old age demographic.
  3. Millennials are now (finally) ready to buy and rental prices are comparatively high.
  4. Employment among college-educated potential buyers is considered to be “tight as a drum.”
  5. In January 2019, average hourly wages jumped 0.5% for all American workers.
    1. January is just one month BUT this 0.5% jump in wages is significantly above trend. (Average hourly wages have grown at an annual average of just 2% in this entire , decade long post-crisis recovery period.)
    2. When people earn more, they buy more whereas when people get a one-time tax cut or one-time bonus, they save more.
  6. At the low end of the income spectrum, one million minimum wage earning Americans are getting a raise this year from Wal-Mart, Aetna, TJ Maxx and other companies will be forced to follow suit.
    1. 29 states have unilaterally hiked minimum wages in the last 2 years.
    2. If the federal government makes good this year on its proposed 40% national wage hike, “look out.”
  7. Home construction stocks are trading higher than their peaks…this signals that better fundamentals are to come.
  8. More than just the wealthy 20% are now in the stock market.
  9. Credit standards are easing, according to the Federal Reserve’s survey of senior loan officers. Easing credit standards = more qualifying borrowers.
  10. The housing market uptick is already in progress.
    1. In January 2019, according to Bloomberg, new homes hit an equivalent run-rate of 1.07M homes annually,

 

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