ANZ analysts suggest that for the US economy, recession fears remain elevated amid a persistent inverted yield curve with much of the inversion resulting from a sharp decline in long-term yields and this decline is a positive for residential investment.
Key Quotes
“We expect lower mortgage rates and favourable demographics to support housing activity over the next 18 months despite a number of supply-side headwinds. We estimate that residential investment could contribute around 0.5ppts to GDP growth over the next six quarters.”
“Increased residential construction activity will have positive effects on other industries, like manufacturing and financial services. There may also be a wealth effect flowing on from higher house prices.”
“This reasonably constructive outlook for housing suggests that there remains some life in the US cycle yet.”
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