2021年7月31日星期六

The No. 1 Stock to Buy to Play Today’s Housing Boom

Luke Lango's Hypergrowth Investing

The #1 Stock to Buy to Play Today's Housing Boom

Luke Lango

The housing market is on fire.

This past Tuesday, the S&P CoreLogic Case-Shiller Home Price Index showed that U.S. home prices set another record in May, rising nearly 17% year-over-year.

But you didn't need me to rattle off that data point to prove to you that the housing market is red-hot right now. You can tell that just by opening up Zillow, or RedFin, and looking at the prices of the homes for sale in your neighborhood.

If you haven't done that already, please do it right now – it's a real eye-opener. I bet you'll see some prices that quite literally make your jaw drop; prices you thought you'd never see before. And if you really want to have some fun, go check the Zillow estimate for your home (you'll walk away feeling richer than you did before you checked, trust me).

In any event, the housing market is on fire, and we all know it.

As a result, there are lots of folks out there who are saying that the current housing boom has created a housing bubble, and that the prices of homes in the U.S. will inevitably collapse soon.

To those folks, I ask one simple question: Why?

As the saying goes, bull markets don't die of old age, and bubbles don't pop just because. So, even if we are in a housing bubble, there has to be some catalyst that emerges to pop that bubble and end the housing market boom.

What is that catalyst?

Frankly, you'd be hard-pressed to find one.

Home demand is, and will, remain robust. All those millennials that pushed back home-buying forever have now saved up a ton of cash and are ready to unload all that cash as a down payment for their first home. A lot of them are just sitting on the sidelines right now, waiting for the moment prices in the housing market decline, even just a little, so they can jump on the opportunity – which will, of course, push prices back up.

Plus, households have saved up a record amount of money during the pandemic, and the pandemic sparked a permanent escalation in the perceived consumer value of a home. What's more, Baby Boomers are downsizing, while the Fed is committing to a zero-rate policy, which is keeping mortgage financing rates stuck near all-time-lows and improving the affordability of homes.

In other words, there are a lot of drivers working in favor of housing market demand right nowand all those drivers appear to have multi-year staying power.

Looking at the supply situation, we see similar bullish trends. Homebuilders didn't build in 2020. That has led to historically tight supply in the housing market today. Granted, all those homebuilders have rapidly re-upped construction in 2021 – but it takes a while to a build a home, especially here and now with lumber shortages, and a lot of that new supply likely won't come online until late 2022 or early 2023.

So, you're looking at another 12-plus months of an enormous supply-demand imbalance in the housing market. And, even when all that new supply does come online, will it be enough to offset surging demand? Or will it simply "balance" the market?

We think the latter – meaning that once this new supply does come online, we'll simply see slower price appreciation, not a 2008-style housing market collapse.

Net net, we may be in a housing bubble, but the underlying fundamentals imply that today's housing boom will last for the next 12 to 24 months, at least.

We want to invest in this boom — but alas, here's the million-dollar question: What's the best way to play the housing market boom?

You could buy homebuilders. After all, home supply is low, and needs to move higher. That means homebuilders will benefit from lots of building activity in the coming 12-plus months. Names like LGI Homes (LGIH), PulteGroup (PHM), KB Home (KBH), Lennar (LEN), and Toll Brothers (TOL) look interesting.

Residential REITs are also interesting. AvalonBay Communities (AVB) and Equity Residential (EQR) are two top plays there. And, of course, you always have Home Depot (HD) and Lowe's (LOW) as great plays, because the more folks buy homes, the more they're going to be installing hardwood floors, re-doing kitchens, and remodeling bathrooms.

But none of those options include the best housing stock to buy to play this red-hot housing market.

Instead, the best housing stock to buy right now is a completely different type of company… one that isn't just a participant in the housing market… it is completely redefining how the world buys and sells homes.

Because here's the thing: Nearly 40% of millennials – who are turning into the heartbeat of the housing market – are comfortable buying a home online.

Yep. You read that right. They want to buy homes online. And technological advancements in data science, video streaming, and augmented reality will dramatically improve the online home shopping experience over the next few months and years.

To that extent, we think it's inevitable that the home shopping market is going to shift online in the 2020s, much as the apparel shopping and consumer electronics shopping markets shifted online in the 2010s.

And at the epicenter of this trillion-dollar-shift in the U.S. housing market is one technology startup – one tiny stock that will soar more than 10X over the next few years. 

To find out the name, ticker symbol, and key business details of this explosive investment opportunity, click here.

Sincerely,

Signed:


Luke Lango
Editor, Hypergrowth Investing

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It's the theme of his premiere technology-focused service, Innovation Investor. To see Luke's entire lineup of innovative cutting-edge stocks, become a subscriber of Innovation Investor today.


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