Market Overview

Morningstar: Home Construction Boom Just Around The Corner


A boom in housing construction is just around the corner, an analyst said Monday.

An improving job market and loosening lending standards will unleash pent-up demand and lead to the best decade for residential construction since the 1970s, in the view of Morningstar's Daniel Rohr.

Top sector picks according to Rohr: the lumber concern Weyerhaeuser Co (NYSE: WY), steelmaker Nucor Corporation (NYSE: NUE) and home builder NVR, Inc. (NYSE: NVR).

Banks well positioned to benefit from a mortgage boom include U.S. Bancorp (NYSE: USB), BB&T Corporation (NYSE: BBT) and Fifth Third Bancorp (NASDAQ: FITB), according to Rohr.

Rohr forecast annual housing starts of 1.9 million by 2019, up from 1 million recorded last year and comparing with a consensus estimate of only about 1.45 million.

The prediction "might sound outrageous given the disappointing recovery of the past few years," Rohr said. "But the outlook is so promising precisely because the recovery has been so poor."

The coming decade will see millennials, the largest generation in U.S. history, form households and buy homes for the first time, Rohr said.

A weak job market coupled with tight credit and high consumer debt has so far stymied what Rohr sees as inevitable "demographic potential."

Rohr forecast an average of 1.6 million annual housing starts through 2024, a rate bested during the postwar era only by the 1.75 million average annual starts of the 1970s.

Latest Ratings for WY

Aug 2020CitigroupMaintainsBuy
Aug 2020B of A SecuritiesMaintainsNeutral
Aug 2020RBC CapitalMaintainsOutperform

View More Analyst Ratings for WY
View the Latest Analyst Ratings


Related Articles (WY)

View Comments and Join the Discussion!

Posted-In: Daniel Rohr morningstarAnalyst Color Analyst Ratings

Latest Ratings

UBERRBC CapitalMaintains50.0
WIXJMP SecuritiesMaintains363.0
CVIJP MorganInitiates Coverage On22.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at