4 Real Estate Fund To Buy As US Housing Starts Surge In July

Homebuilding activity in America accelerated the most in nearly four years, surging 22.6% in July and recording the biggest gain since October 2016. On Aug 18, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development’s jointly reported that housing starts came in at a pace of 1,496,000 units in July. The figure is much above June’s revised figure of 1,220,000 and beats the consensus estimate of 1,241,000 units.

The figure indicates the largest increase in homebuilding, especially with the Northeast region recording a 35.3% increase from June. Housing starts in the South jumped 33% from June and the Midwest and West registered around 6% increase each in July. The report also states that multi-family projects of five units or more surged nearly 57%, marking the largest increase since October 2016. However, construction of single-family increased just 8.2% in July.

July’s construction pace was the fastest since February this year, when coronavirus outbreak had halted the record-long expansion of the U.S. economy. In fact, July’s surge now puts housing starts just 4.5% below February’s pace of 1,567,000 units.

Building permits issuance also rose 18.8% in July to a seasonally adjusted annual rate of 1,495,000. The figure surpassed the consensus estimate of 1,333,000 and beat June’s revised figure of 1,258,000 units.

Earlier this week, a report by the National Association of Home Builders stated that confidence among home builders surged to 78 in August. The index’s August figure now marks its highest level matching the December 1998 record.

Our Top Real Estate Fund Picks

The U.S. housing sector is emerging as one of the bright spots of the economy. In fact, the solid housing data indicates that this sector has overcome the coronavirus slump and is poised to grow. Hence, we have highlighted four real estate mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such factors.

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