HVAC Stocks To Buoy On Dovish Fed & Housing Market Strength
Zacks Investment Research | Nov 26, 2019 09:19PM ET
The American housing market is anticipating growth thanks to the Fed’s three consecutive interest rate cuts this year. The low-interest rates prompted the mortgage rates to fall as well, thus opening a doorway for prospective homebuyers.
Of course, this would mean that homebuilders aren’t the only gainers from this trend. A string of companies from various sectors such as heating, ventilation and air conditioning (HVAC) to interior design and furnishing are bound to get a boost from the housing market’s underlying strength. Here we will concentrate on HVAC stocks that investors could consider.
Fed Chief is Optimistic About the Economy
Federal Reserve Chairman Jerome Powell recently indicated that the low-interest-rate environment isn’t going to change anytime soon. The major reason behind Powell’s remarks is that annual inflation remains below the central bank’s target level of 2%.
Speaking at the Greater Providence (Rhode Island) Chamber of Commerce earlier this week, Powell said the three rate cuts earlier this year (current benchmark rates are in the range of 1.5%-1.75%) have led to more home purchases. These purchases have contributed to the American economy’s continuing expansion.
In fact, the U.S. economy is currently in its 11th year of expansion, the longest in history. Powell also said that the current monetary policy is apt as long as the current “generally good” conditions persevere.
Overall Housing Market Remains Strong
Although sales of new American single-family homes slumped in October unexpectedly, the housing market in general is doing well, thanks to lower mortgage rates. After all, new residential sales in September were revised higher to 738,000 units from the previously reported 701,000 units, which are, in fact, the highest since July 2007.
According to the U.S. Census Bureau and the Department of Housing and Urban Development on Nov 26, new residential sales Zacks Investment Research
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