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Existing Home Sales Hit 14-Year High: 4 Home-Furnishing Picks

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The U.S. economy may be showing some improvement amid the coronavirus pandemic but the housing market continues to remain red-hot. In fact, the housing market showed no signs of settling down in August following a record July.
 
Per the National Association of Realtors (“NAR”), sales of existing homes in the United States increased at a seasonally adjusted annual rate of 6 million units, or 2.4%, in August from July. What’s more, such an uptick followed a whopping 24.7% jump in existing home sales in July, which was the best monthly gain since 1968. In reality, existing home sales improved for the third successive month in August. 
 
Further, in August, existing home sales surged 10.5% from the same period last year, the fastest pace of home sales since December 2006. The Northeast region, in particular, witnessed the biggest jump in home sales, up 13.8% from July. In fact, all regions registered an improvement in sales. Despite wildfires in the West and Hurricane Laura impacting the South, both the regions registered a 0.8% increase in sales from July.
 
Another report from NAR, in the meantime, noted that buyer foot traffic nationwide increased substantially for the second consecutive month in August, with home showings rising 20% from August 2019, which also marked the largest year-over-year increase. No doubt, demand for homes increased and it’s mostly due to the positive impact of record-low mortgage rates.
 
The 30-year mortgage rate in the United States reached a low of 2.88% in early August, while it dropped below the 3% mark in July. The average 30-year mortgage rate, currently, may have touched 3.01% but is still below 3 basis points over the last seven days. 
 
Nonetheless, mortgage rate remains at low levels as the Fed kept its short-term interest rate near zero. The Fed had to trim rates in mid-March as the coronavirus pandemic made serious damage to economic growth. The Fed also expects to keep benchmark rates near zero until the end of 2023 and tolerate periods of higher inflation as they go all-out to resuscitate the labor market and economy.
 
Lawrence Yun, NAR’s chief economist, summed up by saying that “further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

Buy 4 Home Furnishing Stocks Now

For investors looking to benefit from the surge in previously-owned U.S. homes amid low mortgage rates, home furnishing stocks are the perfect choice. After all, homebuying will drive demand for houseware products and various other household goods. Thus, we have selected four solid home furnishing stocks to invest in. They flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
 
At Home Group Inc. (HOME - Free Report) offers a wide range of home products, including furniture, mirrors, rugs, art, housewares, tabletop, patio and seasonal decor. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen more than 100% over the past 60 days. The company’s expected earnings growth rate for the next quarter and current year is 46% and 196.5%, respectively.
 
RH (RH - Free Report) is a leading luxury retailer in the home furnishing space. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 46.4% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 42% and 12.1%, respectively.
 
Tempur Sealy International, Inc. (TPX - Free Report) is involved in the development, manufacturing and marketing of bedding products primarily in North America. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has climbed 65.3% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 45.9% and 18%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
WilliamsSonoma, Inc. (WSM - Free Report) is a multi-channel specialty retailer of premium quality home products. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has risen 35.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 27.7%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
 
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.