Many home construction company gains occurred during periods of low U.S. home mortgage and other related rates. CNBC reported iShares Home Construction ETF saw a 7.6% average return, Masco averaged around an 8.4% gain, D.R. Horton reported an 8.7% average return, Lennar gained 10.1% and PulteGroup saw the highest average return of 14.8% during low rate and strong growth periods.
Historical evidence for improvement of housing-market-related stocks. CNBC took a look at previous situations to determine a projection for the future of the housing market. In 1980, the 10-year Treasury yield dipped under 2.5%, and gross domestic product teetered above 2%. The result of these two numbers meeting instigated four quarters when home? builder stocks skyrocketed. This pattern could be mimicked in 2015.
Kiplinger, a business forecasting and finance advising company based out of the District of Columbia, reported GDP at 2% during the fourth quarter, MarketWatch noted that the current 10-year Treasury dropped to 2.19% Dec. 30. These conditions mimic those observed previously and lead economists to forecast a great year in 2015.