The housing market remains strong, and with a major shortage of inventory in the U.S., the sector is likely to remain strong for the foreseeable future.
According to analysts at Realtor.com, more than two-thirds of the markets they track have inventory levels less than a year ago. This inventory shortage should allow homebuilders, and companies that rely on the housing market, to remain solid even as interest rates start inching higher.
The Federal Reserve recently announced its third rate hike since the financial crisis, and analysts expect to see a couple more rate hikes through the remainder of the year. While rising rates will have some impact on the overall housing market, even with the recent rate hikes, the overnight funds rate remains incredibly low in a range of 0.75 percent to 1.0%. With rates so low, the housing market should easily be able to withstand a couple more small rate hikes.
Given the low inventory level, there is a strong case to be made for investing in housing-related stocks, but given the uncertainty of rising interest rates, it would be wise to look for the best possible values when entering the sector.
The following five stocks all appear to offer a great value at today’s price, and if you are looking to jump into the sector, or to build on current positions, these stocks deserve a closer look.