Lately investors have been confronted with conflicting data out of the home building sector. What should you make of it?
On Tuesday, the news about housing was decidedly bearish. According to government data, new U.S. housing starts and permits unexpectedly fell to record lows in April. “It obviously calls into question the notion that the housing market is stabilizing," says Brian Dolan, chief currency strategist at Forex.com.
However just one day earlier a slew of factors suggested the exact opposite. Lowe’s beat Street estimates and said “we have seen… housing turnover show signs of a bottom in certain markets.” Regional banks said the mortgage business was booming and the National Association of Home Builders said its housing market index rose for the second month in a row.
What does it all mean?
For insights we turned to one of the most widely followed experts in the sector; Deutsche Bank housing analyst Nishu Sood.
“Since March the debate has been raging as to whether housing has bottomed," explains Sood on Fast Money.
Although he agrees that there are green shoots Sood thinks there’s a fundamental factor that’s still quite brown. “Certainly the bubble has burst and the price declines are behind us but the main issue remains the economy.”
Sood feels the economy is dragging down demand and "that outweighs affordability which is the bulls main argument."