The housing sector has been doing well for the past year despite the pandemic wreaking havoc. Although prices are skyrocketing and mortgage rates are going up since the beginning of this year, people are still buying new homes. This boom in the housing market at the same time is also helping industries like furniture and furnishings.
Home Market Continues to Grow
People have been rushing to buy homes ever since the economy reopened. This made 2020 a great year for the housing market and this year too started on a high, with home sales growth logged in March.
New home sales jumped 20.7% month over month to a seasonally adjusted annual rate of 1,021,000 units in March. Moreover, according to the National Association of Realtors, total sales volume for existing homes ended at 5.64 million units in 2020, increasing from 5.34 million units in 2019. This is the highest level in 14 years.
The momentum has continued into this year and people are buying homes despite skyrocketing prices. Moreover, according to brokerage firm Redfin, home sales this year could hit a record high of $2.5 trillion given the low mortgage rates and soaring demand for larger properties away from cities to avoid living in crowded places.
Home Sales Driving Furniture, Furnishing Sales
The homebuilding industry so far hasn’t been affected much despite the pandemic-led shut down in the months of April and May 2020. New homes have been helping sales of furniture and furnishings, which too are thriving. Since mortgage rates are expected to remain low, demand for furniture products is set to escalate in the coming months.
According to a report in
Business Wire, the home decor market in the United States was valued at $190.96 billion in 2020 and is expected to reach $283 billion by the end of 2026.
Also, according to Mastercard SpendingPulse, retail sales jumped 23.3% year over year in April, which is a clear indication that people are spending more. According to the Home Furnishings Market 2021 Insights and Business Scenario, published in ksusentinel.com, the global home furnishings market is also projected to witness a CAGR of 6% by 2025.
The work and learn-from-home culture due to the COVID-19 pandemic too has been aiding the furniture and furnishings industries as consumers are investing in more home improvement projects. This is likely to continue in the future too with no signs of the pandemic ebbing.
In such a scenario, we suggest six stocks from the furniture and home furnishings industries that possess strong growth potential and have witnessed robust earnings estimate revisions in the last 30 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. The company is the leader in sleep innovation.
The company’s expected earnings growth rate for the current year is 38.2%. The Zacks Consensus Estimate for current-year earnings has improved 11% over the past 30 days. Sleep Number Corporation has a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Leggett & Platt, Incorporated ( LEG Quick Quote LEG - Free Report) is a global manufacturer that conceives, designs and produces a wide variety of engineered components and products found in many homes, offices and automobiles.
The company’s expected earnings growth rate for the current year is 27.2%. The Zacks Consensus Estimate for current-year earnings has improved 11.1% over the past 30 days. Leggett & Platt carries a Zacks Rank #2.
Bassett Furniture Industries, Incorporated ( BSET Quick Quote BSET - Free Report) is a leading manufacturer and marketer of high-quality, mid-priced 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 18.8% over the past 60 days. Bassett Furniture Industries sports a Zacks Rank #1.
Ethan Allen Interiors Inc. 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 26.8% over the past 30 days. Ethan Allen sports a Zacks Rank #1.
WilliamsSonoma, Inc. ( WSM Quick Quote WSM - Free Report) is a multi-channel specialty retailer of premium quality home products. Incorporated in 1973, the company has five brands, with and each brand being an operating segment.
The company’s expected earnings growth rate for the current year is 9.2%. The Zacks Consensus Estimate for current-year earnings has improved 26.4% over the past 60 days. WilliamsSonoma has a Zacks Rank #1.
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