One of the best-performing sectors of the market throughout the pandemic and into the post-COVID world has been the housing sector. Thanks to several tailwinds, a snapback of demand, and new emerging trends, housing has been red hot. Not only has this boosted home prices, but also the share prices of stocks related to the housing market – from home builders and home-focused retailers to firms providing mortgages and real estate services.
There’s just one problem. Data suggests that the housing market may be nearing its peak.
While some of housing’s tailwinds may persist, the cracks in the system shouldn’t be ignored. And while we may not see a housing crash any time soon, the sheer abundance may be over. With that, investors may want to dial-back their housing holdings and play a cautious approach.
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