The U.S. housing sector has been on a tear ever since the economy reopened. Record low mortgage rate couple with demand for new homes has seen a surge in price. Despite that people are buying homes. This demand is favoring other related industries like furniture and home furnishings.
Home Market Continues to Grow
Last year,home sales in the United States reached its highest level since 2006 as historically low mortgage rate fueled demand.
On Jan 22, the National Association of Realtors said that existing home sales increased 0.7% in December from the prior month to a seasonally adjusted rate of 6.76 million units. Total sales volume for existing homes in 2020 ended at 5.64 million units, increasing from 5.34 million units in 2019. This is the highest level in 14 years.
The pandemic saw many leave big cities and shift to smaller towns and suburbs that helped sales of homes. Moreover, record-low mortgage rates helped home buyers.
Home Sales Give a Boost to Furniture and Furnishing Industries
Although there has been a spike in COVID-19 cases, the homebuilding industry has continued to grow on record-low mortgage rates. Moreover, increasing investments in e-commerce, product innovation and accretive buyouts are likely favor the furniture industry in the days to come.
Moreover, work and learn from home due to the pandemic have been pushing consumers to take on more home improvement projects. So, it is likely that people will invest more in home improvement in the future.
Companies are pumping in more money to develop a new and improved product mix to stay afloat in a competitive landscape. This too is likely to help the furniture and furnishing players.
Amid such a scenario, we suggest four stocks from the furniture and home furnishing industries that possess strong growth potential and have witnessed robust earnings estimate revisions in the last 60 days.
Sleep Number Corporation ( SNBR Quick Quote SNBR - Free Report) transformed the mattress industry with the idea that “one size does not fit all” when it comes to sleep. Today, the company is the leader in sleep innovation and was ranked Highest in Customer Satisfaction with Mattresses by J.D. Power.
The company’s expected earnings growth rate for the current year is 52.2%. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the past 60 days. Sleep Number Corporation has a Zacks Rank #2 (Buy).
Bassett Furniture Industries, Incorporated ( BSET Quick Quote BSET - Free Report) is a leading manufacturer and marketer of high-quality, mid-priced home furnishings. With over 130 Bassett Furniture Direct stores, Bassett has leveraged its brand name in furniture with a network of licensed and company-owned stores.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 26.1% over the past 60 days. Bassett Furniture Industries has a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here. LaZBoy Incorporated ( LZB Quick Quote LZB - Free Report) is one of the world's leading residential furniture producers, marketing furniture for every room of one’s home.
The company’s expected earnings growth rate for the current year is 26.4%. Its shares have 9.4% gained in the past 30 days. LaZBoy carries a Zacks Rank #3 (Hold).
Ethan Allen Interiors Inc. ( ETH Quick Quote ETH - Free Report) is a leading interior design company, and manufacturer and retailer of quality home furnishings.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 23.4% over the past 60 days. Ethan Allen sports a Zacks Rank #1.
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