Housing stocks set to double—here's why
2015-05-27Lee notes that household formation numbers compiled by the U.S. Census have recently started to break out. But the usually bullish strategist says they still have a long way to go.
Of course, if many more young people start buying homes, that's a natural boon to the companies building them.
"I think housing and housing-related stocks are all buys," Lee said. "If housing starts go to 2 million, which is where we think they're going to go, the builders are going to rise almost 150 percent from here."
And this all has very positive ramifications for the broader economy and market.
"I think it's a very bullish sign because when you look at housing cycles... there's so much revenue and activity generated by housing that if starts go to 2 million, it's several hundred billion dollars of incremental revenues for that sector."
Lee isn't the only bull crowing about the housing market these days.
Canaccord Genuity equity strategist Tony Dwyer made a similar point Tuesday in a note to clients, writing that the "acceleration in the number of millennials turning 30 over the next six years ... could ramp household formations," particularly given the "positive employment outlook" and "low household debt service ratio."
Source:CNBC.com
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