Markets with Megan

In this episode of Markets with Megan featuring Megan Horneman, Chief Investment Officer at Verdence Capital Advisors, she discusses the latest economic data in the housing market. With surprising increases in housing starts and existing home sales, there's finally some good news after years of disappointing trends. Notably, the rise in single-family housing activity signals a positive shift, though challenges such as supply shortages and rising prices persist, impacting affordability. Tune in as we look into the implications of these developments and what they mean for the future of the housing market. If you're interested in learning more or have any questions, don't hesitate to reach out to podcast at Verdence dot com.

After about two years of just disappointing and atrocious data in the housing market, this week we started to see some signs of life. This is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors. We're coming to you today with our regular segment of Markets with Megan, and we wanted to discuss this week's economic data that we've gotten on the housing front. Yesterday, we got a double-digit increase in housing starts in the month of February. That was much better than expected, and what's good about that is the other report that comes out alongside housing starts is building permits, and that's a leading indicator for future construction. That actually was much better than expected as well. In the month Today, which is Thursday, march 21st, we saw nearly a 10% jump in existing home sales. When you look at the expectations before that report came out, analysts had expected that reading to be negative. The good news underneath for both of these indicators yesterday's data and then today's is that the increase in sales and starts was led by the single-family housing sector, not necessarily the multi-family housing sector, which we already have a supply glut going on there. We need more single-family homes, and both of these indicators saw increases there. What does all this mean? When it comes to housing. Any good news is good news for housing.

It's been a really tough couple of years because of higher interest rates and skyrocketing prices in the housing market. It's going to still take some more time, we think, to get the supply demand imbalance worked out. If you look at the month supply of existing homes, it did dip lower again in the month of February, so it's 2.9 months. That's compared to the past 20-year average of 5.4 months. In addition, the existing home prices. They did rise for the first time in eight months. This is going to continue to put pressure on the affordability of homes. You have less supply, you have higher prices. So home by our affordability still remains a problem. We'll continue to watch this data because we would like to get some life in the housing market. It's been one month. Let's hope that this can continue, especially as we go into the spring selling season. That's all we have today. If you have any questions or comments, please feel free to reach out to podcast at Verdence dot com. Thank you.