The long awaited recovery in the US housing market

Significant household investment decisions depend on confidence, or ‘animal spirits’, which are clearly emerging in the USA. As per history, this confidence will manifest in households making high-value purchases – particularly new residential housing. While market analysts are expecting construction of new US housing to take four years to grow from current levels of 1.2 million per annum to the long-term average of 1.5 million per annum, this forecast seems too conservative. We provide evidence of the pent-up demand for housing and then describe why the conditions exist for this potential demand to translate into actual demand that will exceed 1.5 million new houses. We then look at exposure to the recovery in the US housing market via Boral (BLD).