A positive environment is brewing for U.S. homebuilders. The current inventory of homes for sale is at all-time lows. In other words, despite half a decade of recovery, new single-family construction remains depressed.
Hedgeye housing analyst Christian Drake sees an opportunity here for homebuilder stocks. Current inventory numbers suggest there is about 4 months of home supply versus what is generally considered a "balanced housing market" of 6 months.
There is a significant amount of upside for homebuilders to fill this gap.
“You’ve got about 62-percent upside existing to average peak of single-family construction activity,” Drake explains in the clip above.
Watch the full clip for more.
