The US housing market was at the centre of the financial crisis that engulfed the globe during the summer of 2007. However, the sector has gradually improved since the crisis, with banks dealing with bad mortgage loans and new building recently starting to pick up.
Kevin Gardiner, Barclays’ head of investment strategy for Europe, the Middle East and Africa, said: “The [past] half decade has seen the US housing sector become progressively purged, to the extent that it is increasingly being considered as one of the brighter spots of a mixed, but gradually improving, macroeconomic picture.”
Gardiner highlighted ten US equities that are likely to benefit from a housing recovery in the US. These companies are rated ‘overweight’ by Barclays’ corporate and investment banking division.
Half of the stocks are in the consumer discretionary industry. These are home improvement retailer Home Depot, housebuilder KB Home, flooring company Mohawk Industries, building materials firm Owens Corning and homebuilder PulteGroup.
Another four are financials – Citigroup, JPMorgan Chase, US Bancorp and Wells Fargo – while the remaining stock pick is mining and materials company Freeport McMoRan.
Gardiner added:“Housing sector-related stocks in particular have already risen, considerably so in some cases.
“That said, we believe that the improving fortune of the US housing sector is a long-term trend and one which still presents value for risk averse investors.”
