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Market Weakness Presents Opportunities In Housing And Mortgage Sectors

With the recent market correction knocking down stock prices, it is time to get bullish on a selective group of stocks. There is still room for growth in housing and mortgage sectors.

The data suggests underlying strength. A recent mortgage applications report showed strong activity in the prior week. Notably, total applications grew 11.3% and purchase applications were up 25% versus the prior year. The domestic housing supply is also showing higher prices with the Case-Shiller 20-city Index reporting 5% gains for the month of June. Most importantly, July Housing Starts were close to 1.2 million units. This level of construction is near the 1.3 million units that is considered healthy for the market and well off of the post-financial crisis lows.

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