The U.S. housing market has boomed over the past two years, thanks to ultra-low interest rates and increasing demand amid a remote working environment. Home prices rose 16.9% in 2021 and are expected to rise again this year. Home sales have increased 8.5% year-over-year to 6.12 million homes, the highest since 2006.
The growing economy, rising demand for housing, and income growth are the main factors that will keep sales levels high in 2022, despite climbing mortgage interest rates. Amid the sustained purchasing power of homebuyers, the median home sale price is projected to rise 2.9% in 2022. Given these factors, we think it is advisable to invest in the stocks of homebuilding companies NVR, Inc. (NVR) and Hovnanian Enterprises, Inc. (HOV), which could achieve robust growth.
