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Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing

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Goldman Sachs Sees ‘Strong’ Recovery Starting for Housing

By Prashant Gopal - Jul 23, 2012 11:08 AM ET

U.S. homebuilders are an attractive investment as the housing market starts a “strong” recovery that may drive a surge in new-home sales, Goldman Sachs Group Inc. (GS) said in a report today.

Housing has a “long list of positives,” including rising prices, job growth, supportive government policies and a decline in the so-called shadow inventory of homes, Goldman Sachs analysts Joshua Pollard and Anto Savarirajan wrote in a note to clients. They raised their rating on the homebuilding industry to attractive from neutral.

Public homebuilders, which have been taking market share from closely held companies, reported increasing orders this year as mortgage rates fell to record lows and the supply of existing homes for sale shrank. Construction of single-family houses rose 4.7 percent in June to a 539,000 annual rate, the fastest in two years, the Commerce Department said last week.

“The super cyclical housing market has turned and a strong recovery in new-home sales is ahead,” the Goldman Sachs analysts wrote. “Over the last year a number of risks to the housing market have abated, giving us confidence that rising home prices will drive a 3-7 year up-cycle in the U.S. market.”

more:
http://www.bloomberg.com/news/2012-07-23/goldman-sachs-sees-strong-recovery-starting-for-housing.html




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