Despite the violence and geopolitical turmoil we read about everyday from Western Europe to the Middle East to the US, economic conditions in the states remain favorable and the America consumer continues to take advantage of it.
US homebuilders in particular seem to be benefiting from a perfect storm of bullish forces.
On Thursday, homebuilder PulteGroup (PHM) reported a 41% jump in home sale revenues. The value of new orders spiked 21% to $2.1 billion.
“We remain optimistic about the direction of the overall housing market and expect that current economic conditions, continued job formations and low interest rates can support slow and steady growth in housing demand for the next several years,” CEO Richard Dugas Jr. said. “Against this backdrop, we believe that our prior period land investments position us well for continued strong earnings growth.”
Indeed, the US economy looks great with retail sales strong and banks reporting a persistent rise in lending activity. Recent reports from the Labor Department continue to reflect strength in hiring, which encourages more folks to move out of their parents’ basements. And rates are so low that in many parts of the world, rates are even negative. In particular, low mortgage rates have been a boon to housing market activity.
Of course, skeptics can’t help but be concerned about this level of optimism, especially considering devastating housing cycle the US economy experienced just a decade ago. Of course, this time is different, some say.
PulteGroup shares are up 4% in pre-market trading.
Sam Ro is managing editor at Yahoo Finance.